Monday January 5, 04:00 PM

RBI may cut rates more in 2009 - Macquarie

MUMBAI (Reuters) - The Reserve Bank of India (RBI) may cut key rates by another 100 basis points in the current quarter and potentially follow that up with another cut of the same quantum in the April-June quarter, Macquarie Research said in a note.

* "Political uncertainty in the run-up to the general elections that have to be held by May 2009 will also prompt policymakers to favour further monetary easing over big-bang fiscal spending initiatives," Rajeev Malik, economist at Macquarie Securities, said in a note.

* "The fiscal measures will likely have only a limited positive impact on the sharp deceleration in economic growth," the note said.

* On Friday, the RBI cut its key lending rate to an 8-1/2-year low of 5.5 percent and the government opened the corporate bond market to more foreign investment, eased overseas borrowing rules and promised more capital to state-run banks.

* A Reuters poll in early December estimates India's economic growth to slow to 6.8 percent in 2008/09 and 6.2 percent in 2009/10.