Skip to main content

RBI to hold rates at 6.50% through mid-2024, cut seen in Q3: Poll

By

 The Reserve Bank of India (RBI) will keep its key interest rate unchanged at 6.50% for a fifth consecutive meeting on Dec. 8 as inflation worries ebb, according to a Reuters poll of economists who unanimously expect the central bank's next move to be a cut. Despite inflation falling to a four-month low of 4.87% in October, it is expected to remain above the RBI's 4% medium-term target for at least another two years. That is likely to keep the RBI from changing its hawkish bias anytime soon. All 64 economists in the Nov. 17-30 Reuters poll expected the central bank to hold the repo rate at 6.50% at the conclusion of its Dec. 6-8 meeting. "We expect the Reserve Bank to stay put. We're not expecting a rate cut before Q3 2024," said Dhiraj Nim, economist at ANZ research. "If they are beginning to see inflation aligning with the 4% target... for one or two meetings, it will be sufficient evidence for the RBI to start pivoting."

 

While the poll medians still showed the first rate cut coming in the third quarter of the calendar year, almost half of economists forecast it will come in the second or earlier. Slightly more than half of respondents, 29 of 56, see the repo rate on hold at 6.50% through the middle of 2024, while 22 expect a quarter percentage point cut to 6.25% by mid-year. The remaining five see a half point cut to 6.00% by end-June. More than three-quarters of a smaller sample of respondents, 33 of 43, said the repo rate would be at the poll median of 6.25% or lower by end-September. The remaining 10 said the repo rate would still be at the current 6.50%. Inflation was forecast to average 5.4% this fiscal year that ends in March and 4.8% in fiscal 2024-25, still relatively high in the 2-6% target range even as the central bank starts to cut rates, a separate Reuters survey showed. "I think the RBI's focus is to keep it at around 5%... They will be comfortable with it because of the volatile nature of food inflation and the kind of weather and climate risk that we are seeing," said Suman Chowdhury, chief economist at Acuite Ratings and Research.

 

-Business Standard 1st Dec, 2023.

Comments

Post a Comment

Popular posts from this blog

Data storage norm splits digital payments industry

By
Data storage norm splits digital payments industry  India’s nascent digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move.  In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET.  “We are trying to build a consensus on the issue," said the person adding that the representation to the central bank will be ready this week.  RBI on April 6, mandated all payment companies—global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of wel...
18 comments
Read more

Offer’s for all of you

By
Great Bumper Dhamaka Offer’s for all of you... It's Time to see your Business Online, WebeCreator Offer Website Designing with domain & Email @ nominal charges. For a year For More information visit us http://goo.gl/KlpppF call on 9890151261/9773197533  drop a mail to sales@webecreator.com
Post a Comment
Read more

Sebi to finalise options in commodities today

By
The Commodity Derivatives Advisory Committee of the Securities and Exchange Board of India ( Sebi) will meet on Friday with senior officials of the latter, to give a final shape to the rules on options trading in commodity futures, beside revising the warehousing norms to ensure good delivery on settlement. The decision taken, after discussing with the advisory committee, will be placed before the regulator’s board, to finalise the regulations. According to knowledgeable sources, three commodities in each segment, agricultural and non- agricultural, have been proposed for introducing options. It appears commodities from the soya and guar segments are preferred in the former. From the non- agri segment, it is likely that gold, silver and crude oil will be finalised. All these These have better liquidity and both the National Commodity and Derivatives Exchange and the Multi Commodity Exchange, respectively, will be able to introduce the options. In the equity segments, options ar...
17 comments
Read more