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RBI expected to hike repo rates by 25 bps
February 08, 2022
Faced with relatively low inflation amid a worldwide surge, the Reserve Bank of India will still wait at least a few more months before it joins other central banks in raising interest rates following the pandemic, a Reuters poll found.
Among the hardest-hit emerging economies from shutdowns and disruptions to business by COVID-19, India has begun to recover much of its lost ground and New Delhi’s latest budget was modestly stimulative compared and expectations.
For sure, the RBI has been notably dovish, having kept its key repo rate at a record low of 4.00% for almost two years.
Respondents in a Feb. 2-4 Reuters survey were closely split on the timing of the next rise, with slightly more than half, 17 of 32, expecting a 25-basis point rise to 4.25% in April.
Among the remaining 15, 13 were nearly split between June and August. While only one economist said it would come as early this month, the other said October of this year.
That would follow a widely expected interest rate rise from near zero in March by the U.S. Federal Reserve, which is grappling with the highest consumer inflation since 1982.
Faced with relatively low inflation amid a worldwide surge, the Reserve Bank of India will still wait at least a few more months before it joins other central banks in raising interest rates following the pandemic, a Reuters poll found.
Among the hardest-hit emerging economies from shutdowns and disruptions to business by COVID-19, India has begun to recover much of its lost ground and New Delhi’s latest budget was modestly stimulative compared and expectations.
For sure, the RBI has been notably dovish, having kept its key repo rate at a record low of 4.00% for almost two years.
Respondents in a Feb. 2-4 Reuters survey were closely split on the timing of the next rise, with slightly more than half, 17 of 32, expecting a 25-basis point rise to 4.25% in April.
Among the remaining 15, 13 were nearly split between June and August. While only one economist said it would come as early this month, the other said October of this year.
That would follow a widely expected interest rate rise from near zero in March by the U.S. Federal Reserve, which is grappling with the highest consumer inflation since 1982.
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