The RBI will keep its benchmark interest rate (repo) at 4.00%, a Reuters poll showed.
Bengali language: The Reserve Bank of India will raise the reverse repo rate early next year and raise the repo rate next quarter, according to a Reuters poll of economists who have discerned whether the variation The latest Covid-19 risks delaying those moves.
This comes as retail inflation – the central bank’s preferred measure – has been within the 2%-6% target range since July.
A Dec 1-3 poll of 50 economists shows the RBI will keep the benchmark interest rate at 4.00% and the reverse repo rate at 3.35% at its May 8 meeting. twelfth.
India’s central bank is expected to raise the repo rate by 25 basis points in the second and fourth quarters of next year, bringing the borrowing rate to 4.50% by the end of 2022.
The rate at which the RBI borrows from banks – the reverse repayment rate – is expected to increase to 4.10% by the end of next year with an initial increase of 25 bps in Q1 2022 and 50 bps cumulative in next three quarters.
“We had previously expected the RBI to increase the reverse repo rate to 15-20 bps in December, but with uncertainty emerging from the new Covid-19 variant, we have,” wrote Morgan Stanley economists. I expect the status quo.”
“The central bank will likely wait to understand the risks posed by the new variant. If the growth impact from the new Covid-19 variant is muted, then we expect policy normalization to starting February with the reverse repo rate increase.”
When asked what is the risk that the spread of the latest Covid-19 variant delays the RBI’s rate move, economists are roughly divided. While 12 out of 23 respondents said the risk was low, the remaining 11 said it was high.
“We are unlikely to see very strict lockdown measures going to have a significant impact on growth,” said Sakshi Gupta, senior economist at HDFC Bank.
“However, if this variation spreads and impacts supply chains globally, input cost pressures will increase even further – this is another concern for inflation, ensuring a RBI’s interest rate response.”
(This story has not been edited by NDTV staff and was automatically generated from the feed provided.)
