Expert Views: RBI keeps repo rate on hold at 6 percent

Last Updated: Wed, Dec 06, 2017 15:16 hrs
Pain for India after bank note shock

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

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"



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