The Reserve Bank of India (RBI) is expected to leave its key interest rate steady at 6.75% next week and only make one cut this year as rising inflation ties its hands, according to a Reuters poll.
That marks a turn from rapidly cooling domestic consumer price inflation, which allowed the RBI to lower the repo rate four times in 2015.
Its last 50-basis-point cut in September took markets by surprise, but the RBI isn’t likely to act as aggressively in 2016, as a renewed uptick in food-costs driven inflation puts the central bank’s medium-term price target at risk.
This week’s poll of nearly 40 economists showed only one 25 basis-point rate cut this calendar year, between April and June, unchanged from earlier expectations. Read Articles