Indian Rupee: RBI tightening path seen shallow – Standard Chartered
Standard Chartered strategists Anubhuti Sahay and Saurav Anand expect the Reserve Bank of India (RBI) to deliver a total of 50bps of repo rate hikes in FY27, split between October and December 2026, citing resilient activity and hawkish August Monetary Policy Committee (MPC) minutes.
Standard Chartered strategists anticipate the Reserve Bank of India (RBI) will implement a total of 50 basis points (bps) of repo rate hikes in FY27, distributed between October and December 2026. This forecast, previously on hold, is attributed to resilient economic activity and hawkish August Monetary Policy Committee (MPC) minutes.
The RBI governor suggested that a recalibration of the repo rate from 5.25% may be necessary as inflation reverts from 2% last year towards 5% in FY27. The analysts identify two risks to their call: stronger inflationary pressures or a delayed hike in December. Despite potential benefits, they maintain that the current hiking cycle is expected to remain shallow.
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