RBI to leave its policy repo rate unchanged at 6% - Nomura
Analysts at Nomura expect the Reserve Bank of India (RBI) to leave its policy repo rate unchanged at 6% at its December meeting, in line with the consensus view.
“We expect the RBI to highlight upside risks to its CPI inflation projection of 4.6% y-o-y in Q1 2018 after the ~15% rise in Brent oil price since the October meeting, but maintain its GVA growth projection at 6.7% in FY18 with balanced risks.”
“A “neutral” policy stance should be maintained, with a more optimistic outlook of growth strengthening further and CPI inflation hovering slightly above the mid-point target of 4%. As a result, we believe the policy decision would be interpreted as a hawkish hold. Focus will be on comments around liquidity and bad asset resolution. With our view of higher growth and inflation ahead, we expect no change to rates through 2018.”