Expert Views: RBI holds repo rate at 6 percent

Expert Views: RBI holds repo rate at 6 percent

Last Updated: Wed, Dec 06, 2017 15:04 hrs
FILE PHOTO: People walk past a barricade inside the Reserve Bank of India (RBI) headquarters in Mumbai

(Reuters) - The Reserve Bank of India kept its policy rate unchanged at a more than seven-year low of 6.00 percent on Wednesday after inflation accelerated to a seven-month high and stronger economic growth reduced the need for monetary stimulus.

COMMENTS

SUNIL SINHA, DIRECTOR AND PRINCIPAL ECONOMIST, INDIA RATINGS, DELHI

"A rate cut in February is unlikely given that the upside inflation risks that the central bank was expecting are still panning out. Given where the vegetable prices and oil prices have stood at recently, CPI and WPI data is expected to come in higher than October numbers.

The tone of the policy statement in my view is cautious. While it highlights positives on the growth front, issues on global development and outlook on inflation put the RBI in a difficult situation."

SUDHAKAR PATTABIRAMAN, HEAD OF RESEARCH OPERATIONS AT MARKETSMITH, PART OF WILLIAM O'NEIL, BANGALORE

"All indicators such as inflation, oil and commodity prices, and global cues have been in one direction since the last policy meet. They don't seem to favour a rate cut going forward."

"I don't see a reason why RBI would cut rates in the next meeting in February unless something substantial changes."

"It's too early to predict beyond the February policy meet, we'll have to see how things shape up."

SUVODEEP RAKSHIT, SENIOR ECONOMIST, KOTAK INSTITUTIONAL EQUITIES, MUMBAI

"It is unlikely that the RBI will move in the February policy too, given the inflation trajectory which is likely to peak in June 2018. Further, global policy rate cycle and commodity prices along with consolidated fiscal position will keep the RBI cautious. However, incoming data versus the RBI's projections will remain key."

"The tone of the policy does not indicate much room for any rate cuts. We maintain our call that the RBI will be on a pause in the near term. Chances of any rate hikes will be contingent on durability of inflation remaining above the RBI's comfort zone"

(Reporting by Bengaluru Newsroom; Editing by Subhranshu Sahu)



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