Business

RBI likely to keep repo rate unchanged in next 2 quarters

RBI likely to keep repo rate unchanged in next 2 quarters

TIL Desk/Business/New Delhi/ With headline inflation expected to remain benign in the second half of the current fiscal, a report on Monday said the Reserve Bank of India (RBI) is likely to keep repo rate, or the rate at which it lends to the banks, unchanged in the rest of the fiscal.

The consumer price index (CPI)-based inflation fell to a one-year low of 3.31 per cent in October 2018, from 3.7 per cent in September 2018 and 3.58 per cent in October 2017.The retail inflation number is the lowest since September 2017 when it had touched 3.28 per cent.

“Given the strong focus of the MPC (monetary policy committee) on the headline inflation print, which should remain benign for the rest of second half of FY19, we see limited scope for rate hikes in the rest of FY19,” the Kotak Economic Research report said.

It expects headline inflation to be in the range of 2.8-4.3 per cent. It can be noted that the apex bank had maintained a status quo in its October policy review after two consecutive rounds of rate hikes of 0.25 per cent each. The repo rate currently stands at 6.5 per cent.

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