The Reserve Bank is unlikely to cut lending rate before April despite moderation in

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inflation, but may further reduce the Cash Reserve Ratio (CRR) in view of the tight liquidity, global financial major Barclays said.

"We continue to see risks of a 25 basis points repo rate cut at the March mid-quarter policy review, while maintaining our base case that the rate-cutting cycle will start in April," Barclays Capital said in its 'The Emerging Markets Weekly' report.

It further added: "We maintain our view of a slow but calibrated reduction in policy rates in 2012-13. However, given the ongoing pressures on liquidity, another 50 basis points cut in the CRR in March cannot be ruled out at this stage".

RBI is scheduled to announce its fourth mid-quarterly monetary policy review on March 15 and its annual review for 2012-13 on April 17.

At its third quarterly monetary policy review on January 24, the central bank had injected Rs 32,000 crore into the system by lowering the CRR by half-a-percentage point to 5.5 per cent but kept the short-term lending, or repo rate unchanged.

Headline inflation, which also factors in manufactured items, fell to a two-month low of 7.47 per cent in December. Food inflation has been in the negative zone for four consecutive weeks since mid-December and stood at (-)1.03 per cent for the week ended January 14.

RBI has, however, said inflation remains a concern in view of volatile crude prices in international markets and widening fiscal deficit.

Attributing the decline in food inflation mainly to seasonal factors, the central bank said the impact of good vegetable output will remain limited in the absence of effective measures to address supply-side bottlenecks.

RBI, which has pegged the year-end inflation at 7 per cent, said the revision in domestic-administered prices would add to inflationary pressures.

RBI had hiked interest rates 13 times between March, 2010 and October, 2011 to curb demand and tame inflation. India Inc has blamed the high interest rate regime, which has increased the cost of borrowings, for hindering investments and industrial slowdown in the country.

Economic growth slipped to 6.9 per cent in the second quarter (July-September), the lowest in over two years. The RBI has revised down the growth forecast for the current fiscal to 7 per cent, from the earlier estimate of 7.6 per cent.

Barclays Capital said that pressure from large government borrowing is compounding the problem of capital spending.

"The RBI expects a modest rebound in growth in 2012-13, along with marginally lower inflation, which we again sense is something that can broadly be achieved," it said.