Government officials have said they would be watching out for the real impact of coronavirus in Q1FY21. There could be some spill over in Q1 of the new financial year because of the disruptions due to coronavirus, since we are already in the last month of the current fiscal.

In terms of inflation, the government is expecting it to be in 4.5-4.6 percent range by July. Looking at the overall scenario, they feel that there could be a scope for lower interest rates. Ideally, some decision should be taken between the Monetary Policy Committee (MPC) meetings. The scope of rate cut they believe could be between 25-50 basis points government sources tell CNBC-TV18.

There have also been talks of reducing small savings rate. Looking at the overall movement of bond yields and the way the interest rates are moving, possibly some downward tweaking is possible.

First Published:Mar 11, 2020 1:57 PM IST