"We have cut our FY14 growth forecast to 5.5 per cent from 5.8 per cent earlier as RBI's tightening will push back lending rate cuts," BofA-ML said in a research note on Tuesday.
The global brokerage firm in March had trimmed the growth forecast to 6 per cent and in June again it revised the growth estimate to 5.8 per cent.
"We had earlier expected growth to stage a shallow recovery to 5.8 per cent on the back of better rains and lending rate cuts," BofA-ML said, adding: "we have now removed the 30 bps (0.3 per cent) we had expected from softer rates."
In a move to stem the continuing fall of rupee, the RBI last night came out with a slew of measures, including hiking the lending rates for banks and sucking up of Rs 12,000 crore (Rs 120 billion).
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