RBI may hold lending rates in line with robust agriculture and easing crude prices: report

Last Updated: Sat, Nov 24, 2018 12:22 hrs
Rupee (PTI Photo)

A report frmo Dun & Bradstreet (D&B) says the Reserve Bank of India may hold the key lending rates at it's next monetary policy committee meeting.

The central bank, the report says is expected to maintain the lending rates in line with easing global crude oil prices and robust agriculture production.

The robust agriculture production and softening of vegetables and fruits prices is expected to keep in check food inflation.

"It would be interesting to know the decision taken by the RBI in its upcoming monetary policy review. Our assessment is that RBI will maintain a status quo in the policy rate," said Arun Singh, D&B's India Lead Economist.

D&B expects the CPI inflation to be in the range of 2.8-3% and WPI inflation to be in the range of 4.8-5% during November this year.

"The risks emanating from global crude oil prices have eased to an extent as oil prices are likely to fall or remain subdued in the near term. This has partially dispelled concerns over one of the primary factors affecting India's current account deficit, fiscal slippage and inflationary dynamics," said Singh.

Singh further added that the return of foreign investors in Indian markets, stability in the rupee, strengthening of industrial production and benign inflation have provided much-required support to expectations of economic growth revival.

However, bad assets in the banking system continue to increase and concerns over probable tightening of regulations in the non-banking segment will also lead to some disruption in the overall financial system in the near-term till clarity emerges, he said.