RBI, wary on inflation, set to keep rates on hold – Reuters poll
The outcome of the latest Reuters poll, a majority of the analysts expect the Reserve Bank of India (RBI) to keep the benchmark interest rates on hold at 6%.
“All but two of 54 analysts in a Reuters Poll said the repo rate would be left at 6.00 percent, the lowest since November 2010.
The RBI is likely to reiterate concern about inflation, as the annual rate increased to 3.58 percent in October. That’s low by Indian standards, but not far from the central bank’s 4 percent target.
Another source of RBI discomfort is that core inflation, which excludes food and energy prices, has remained stubbornly high at around 4.5 percent.
The central bank is likely to reiterate a “neutral” stance, thus giving itself the flexibility to cut rates in February, even though only seven of the 48 analysts in the Reuters poll who gave a view on 2018’s first meeting expect that outcome.”