RBI to pause on Aug 4, 50 bps cut likely in early 2016.

The Reserve Bank is likely to maintain a status quo on rates in its third bi-monthly policy meet on August 4, taking into account "poor rains" and will go for a 50 basis points rate cut in early 2016, a Bank of America Merrill Lynch report , the Consumer Price Index-based retail inflation will fundamentally remain on the RBI's under-6 per cent target and the Wholesale Price Index-based inflation may persist in deflation till October.

We continue to expect the RBI to pause on Tuesday, on poor rains and cut 50 basis points in early 2016# Lok Sabha adjourned till July 30, #RajyaSabha adjourned for the day.