RBI may raise interest rates to 5.50% in Oct
The Reserve Bank of India is poised to raise interest rates by 25 basis points to 5.50% in October, according to a majority of economists surveyed by Reuters. This marks the first increase since February 2023 and a further hike is likely in December. The move comes as inflation has surged to 4.82% in August, surpassing the RBI's 4% medium-term target for three consecutive months.
Energy and food costs have driven the increase in consumer prices. Most major central banks have started or are considering raising rates due to rising energy prices caused by the war in the Middle East. The US Federal Reserve has already indicated at least one more rate hike following an earlier increase. The RBI, under pressure to defend the rupee's value, may be playing catch-up after the US Federal Reserve's rate hike.
Indranil Pan, chief economist at Yes Bank, said the RBI should realize it might be slightly behind the curve and follow suit.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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