RBI unlikely to hike rates in FY19: SBI report

• HDFC
• 26 Oct 2018
• Knowledge Centre

HDFC, Tester

The Reserve Bank of India (RBI) is not expected to hike key lending rates in the current fiscal, according to an SBI Ecowrap report carried by a publication.

 

“CPI inflation marginally increased to 3.77% in Sept-18. Interestingly, on an M-o-M basis, rural food inflation has registered a decline, even as headline registered an increase,” the report said.

 

It added, “Meanwhile, core CPI inflation declined to 5.81%in Sep-18 from 5.92%in Aug-18. We expect CPI for FY19 to come in at 4.2%. Our inflation trajectory projection makes us believe that rate hike is now off the table in FY19.

 

On 5-Oct-18, the RBI maintained a status quo on interest rates in its policy meet, much against market expectations. It kept the key lending rates unchanged, owing to an uncertain global economic scenario. However, it turned hawkish in its stance, adopting one of calibrated tightening from the “neutral” stance it had maintained over its six previous policy reviews.