After PM Modi's massive mandate in Lok Sabha elections, the apex bank is expected to lower interest rates by as much as 100 basis points in 2019, said a global brokerage concern. 1 basis point is one-hundredth of a percentage point.

In its first MPC review meet of FY20, the RBI reduced repo rate by 25 bps to 6% on growth concerns even though inflation was well below the RBI's target.

A report by BofAML said that in order to support various economic parameters such as recovery as well as bring down the yield, in its upcoming June monetary policy review meet the Reserve Bank of India may lower interest rates by 35 bps.

Further, there is expected to be the recapitalization of PSBs with capital money that is kept as surplus as per the Jalan report. Also, there is likely to be a monthly infusion to the tune of $2-3 billion into the money markets to improve liquidity conditions.

Also, for the benchmark indices, the report said, that while the election outcome pushed the index to new highs of 40,000 and 12,000 for the Sensex and Nifty, respectively, hereon focus will be shifted to macro events.

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