High inflation to compel RBI to signal neutral policy stance: S&P

The RBI will likely raise the repo rate by at least 50-75 basis points through FY23, and by another 50 basis points in FY24, the ratings agency said

The Reserve Bank of India (RBI) would be compelled to signal a neutral policy stance in the Monetary Policy Committee’s review meeting in April as average consumer inflation is likely to stay firm at 5.4 per cent in FY23, S&P Global Ratings said in a note. 

The RBI will likely raise the repo rate by at least 50-75 basis points through fiscal year 2023, and by another 50 basis points in fiscal 2024, the ratings agency said.

Separately, Moody’s Analytics said if the US Federal Reserve accelerates its path to policy normalisation, the RBI may have little choice but to