RBI week: economists bet on first rate hike of the cycle to 5.50%
With the Reserve Bank's Monetary Policy Committee meeting Oct 5–7, a Reuters poll shows more than 60% of economists expect a 25-basis-point hike to 5.50% — the first of this cycle — as broadening inflation leaves the central bank little reason to hold.
Prices for nearly half of India's inflation basket rose 4% or more year-on-year, up from around a third in March, signalling price pressures are seeping into the broader economy. August CPI ran at 4.82%, above target.
Thirty-eight of 61 economists polled expect the repo rate to rise to 5.50% at the end of the Oct 5–7 meeting, citing strong growth — the economy expanded nearly 8% in the April-June quarter — elevated crude prices and an adverse global interest-rate backdrop.
Bank credit growth rose to more than 19% in July, nearly doubling from a year earlier, pointing to firmer domestic demand. The decision lands as markets reopen on Oct 5 after the Gandhi Jayanti holiday.
