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The Reserve Bank of India is likely to keep key policy rates unchanged in the upcoming monetary policy review next week and may cut rates only next year, analysts at ratings agencies and brokerages said on Thursday. Governor Raghuram Rajan will unveil the fifth bi-monthly monetary policy review on December 2.
"We believe that RBI is likely to keep policy rates on hold on December 2. We assign a very low probability to a rate cut in that meeting," Morgan Stanley said in a report.
Domestic rating agency CARE Ratings too concurred the view, saying Rajan will go for a status quo on rates at next week's policy review, even though inflation is trending down.
Morgan Stanley said the key thing to be watched in the policy would be the central bank's language regarding its comfort about achieving its inflation target according to its pre-guided glide path, and in turn, the implications of the timing of the first rate cut.
