Reserve Bank of India likely to stand pat in December, may hike in February 2018

The Reserve Bank of India’s upcoming meeting narrative is expected to be the same as in the past statement. According to an ANZ research report, the RBI is expected to keep its repo rate on hold in December and lower it by 25 basis points to 5.75 percent in February 2018. According to the consensus expectations, the Indian central bank is expected to stay on hold through 2018.

Accordingly, the RBI’s monetary policy committee is now expected to keep the repo rate at 6 percent when it meets in December. Excluding the risk of a sharp upside surprise to oil prices, inflation is expected to be contained, and more significantly, begin to reflect the subdued growth conditions again.

The Indian rupee has strengthened in recent weeks, in spite of the higher global crude oil prices, which should cushion the landed cost of oil. In all, an additional rate cut is unlikely off the table as most of the concerns that the RBI has been emphasizing are unlikely to materialise, added ANZ.

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