You are here: Home » Finance » News » Banks
Business Standard

RBI unlikely to change interest rates for rest of this fiscal: Report

RBI is expected to keep interest rates on hold over the coming months

Press Trust of India  |  New Delhi 

RBI Governor Urjit Patel during a press conference announcing the Reserve Bank of India's monetary policy at its headquarters in Mumbai on Wednesday. ( Photo: Kamlesh D Pednekar)
RBI Governor Urjit Patel ( Photo: Kamlesh D Pednekar)

No change in is likely over the rest of this fiscal, as the Reserve Bank of India is expected to adopt a 'wait and see' approach due to rising and downside pressure on the rupee, says a report.

According to BMI Research, headline consumer price (CPI) is likely to head higher over the coming months, largely owing to rising food and housing prices.


"The left its benchmark steady at 6.00 per cent in its October 4 meeting, and we expect no changes to over the rest of the fiscal year," BMI research, a Fitch group company said in a note.

The report said the government's plans for fiscal spending to support economic growth along with farm loan waivers at the state level, which could top Rs 3.2 trillion, pose significant inflationary risks that are likely to prevent the from adopting a looser stance.

Additionally, the is expected to keep on hold over the coming months in an effort to maintain the country's real yield advantage to prevent significant currency weakness due to capital outflows.

The is currently hovering around Rs 65 level against the

"Expectations of an economic recovery suggest that the is likely to continue a 'wait-and-see' approach towards supporting growth while rising and a weakening suggest that there is little room to loosen further," the report said.

First Published: Sun, October 08 2017. 15:51 IST
RECOMMENDED FOR YOU