India / Rates

Reserve Bank of India: Policy guidance under watch

Radhika Rao / December 05, 2017
While markets are currently pricing in two to three rate hikes in India for the year ahead; we don’t believe rate hikes are likely in this timeframe, given our benign inflation forecast. The cen...
Key summary points
  • We expect the RBI to leave policy rates unchanged following this Wednesday’s MPC meeting
  • Our focus will be on the tone of the policy guidance, divided between a neutral and a hawkish bias
  • Inflationary risks and firm 2Q FY18 growth provide the RBI with justification to sound cautious
  • We expect guidance to be cautious; markets are pricing in 2-3 hikes in the year ahead
  • We however don’t believe hikes are likely in this timeframe, given our benign inflation forecast

Reserve Bank of India: Policy guidance under watch

Photo credit: AFP Photo

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