RBI to hike rates early next year: Reuters poll


FE Team | Published: March 30, 2018 11:39:31 | Updated: March 31, 2018 14:51:46


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The Reserve Bank of India (RBI) will keep monetary policy steady at its April meeting but shift to a hawkish stance by the end of this year and raise interest rates early in 2019, said a Reuters poll.  

The poll of 61 economists expected the central bank to hold the repo rate at 6.00 per cent and the reverse repo rate at 5.75 per cent at its April 4-5 policy meeting.

The central bank of the sixth-largest economic country of the world is expected to keep rates steady for the rest of this year, reports Reuters.

After a slowdown in growth through much of last year, India is on an upswing and reclaimed top spot as the fastest growing major economy in the final quarter of 2017, outpacing China.

Inflation on the other hand has eased slightly, but still projected by the central bank to remain above its 4.0 per cent medium-term target in 2018.

February’s inflation print showed inflation at 4.4 per cent, giving the RBI a breather.

According to the central bank’s projections, inflation is likely to average 5.1-5.6 per cent for the first half of the 2018-19 fiscal year, before hovering around 4.5 per cent for the remainder of the year.

The US Federal Reserve raised rates in March and is expected to follow it up with three more hikes this year, according to a separate Reuters poll.

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