RBI expected to be less hawkish, may leave interest rates unchanged

RBI expected to be less hawkish, may leave interest rates unchanged

Latest News – The Reserve Bank of India (RBI) will likely strike a less hawkish tone while leaving interest rates unchanged at a policy meeting on Wednesday, according to analysts, as inflation is running well below forecasts, and the economy has slowed more than expected.

A Reuters poll showed 56 of 60 analysts expected the RBI’s monetary policy committee to keep its repo rate unchanged at a 6-1/2 year low of 6.25 per cent for the fourth meeting in a row. They also expected the reverse repo rate to be left at 6.00 per cent.

What analysts and investors are looking for this time is a less hawkish policy statement to reflect reduced fears of inflationary pressures.

Until a few weeks ago, bond market investors were on guard for possible future increases in interest rates after the RBI warned of “upside risks” to inflation at its last policy meeting in April.

“We don’t expect any change in the official neutral stance in June but we do expect RBI to tone down its hawkishness compared to the April and February policy statements,” said Siddhartha Sanyal, chief India economist at Barclays.

Investors have begun pricing in (Read More)


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