Citi expects 15 bps reverse repo hike by RBI at next week's MPC meet

Indian stocks, which had been rallying on expectations of continued cheap cash, fell after the Citi forecast was published

Citigroup Inc. predicts India’s central bank will raise its reverse repo rate next week rather than the December increase expected earlier, becoming one of the first big banks to forecast the rollback of emergency measures as growth recovers and inflation expectations stay high.

Governor Shaktikanta Das will probably announce on Oct. 8 a 15 basis point increase in the rate at which banks park excess cash with the Reserve Bank of India, economists Samiran Chakraborty and Baqar Zaidi wrote in a note Thursday. At the same time, Das would reiterate that policy will keep supporting growth for an extended period