Reserve Bank of India to hold rates


Jun 6, 2018-

An increasing number of economists expect the Reserve Bank of India (RBI) to raise interest rates on Wednesday, a Reuters poll found, but most still think the central bank will stay on hold and use this week’s meeting to prepare for an August hike. In a snap poll of 56 economists taken after gross domestic product data on Thursday, 26 of those respondents, or about 46 percent, expect the RBI to take the repo rate higher at the June 6 meeting. The GDP data showed Asia’s third-largest economy grew at its fastest pace in nearly two years in the January-March period. That compares with 21 of 57 economists, or about 40 percent of them, in a poll taken before the GDP data was published. “The risk has gone up, definitely, but (we’re) not convinced enough for it to happen in June,” said Kunal Kundu, India economist at Societe Generale. “We still stick to August.” While most economists in the latest Reuters poll expect the repo rate to remain at 6.00 percent on Wednesday, a majority forecast the RBI to raise it by 25 basis points to 6.25 percent in August. The RBI may use the June meeting to shift its policy communication to an explicit tightening bias away from the neutral bias it has held since February last year. (REUTERS)

Published: 06-06-2018 08:03

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