TIL Desk/Business/New Delhi/ The Reserve Bank of India is expected to keep key policy rates unchanged in the remaining 2018-19 fiscal as inflation may stay ‘benign’ in the range of 3 to 4.4 per cent, says a report. According to the report by Kotak Economic Research, the focus of the Monetary Policy Committee (MPC) remains purely on inflation print, which is expected to remain benign ( 3-4.4 per cent) in the second half of 2018-19.
“We thus see limited scope for rate hikes in the rest of 2018-19,” the report added. In the policy review meet earlier this month, majority of RBI’s six-member MPC, including Governor Urjit R Patel, favoured to keep the key repo rate unchanged as part of “calibrated tightening” to keep retail inflation at 4 per cent.
“The minutes reaffirmed our view post the October policy and the September CPI inflation print, that the RBI will possibly stay on hold for the rest of 2018-19,” the report said. It however added that upside risks to inflation still exist owing to pass-through of MSPs, elevated crude oil prices, volatility in global financial markets, hardening of input prices amid rupee weakness and staggered impact of HRA increases by states and its second-round impact.
