MPC minutes: Two more interest rate hikes on cards, maybe even a third
Market participants and economists now expect a 25-bps increase in the December and February reviews. A further 25-bps increase in April isn't ruled out if crude oil prices remain persistently above $100. One basis point is a hundredth of a percentage point. "After the minutes were released, we think the probability of a consecutive hike in December has increased. Our terminal rate forecast is…
India's central bank, the Reserve Bank of India (RBI), could hike its repo rate to a maximum of 6.25% due to persistent motor-fuel prices, according to the minutes of their October meeting. Analysts believe the policymakers are increasingly concerned about growing inflation risks. The RBI had raised the repo rate by 25 basis points to 5.50% in October, and market participants and economists anticipate another 25-basis-point increase in December and February.
If crude oil prices remain above $100 per barrel, a third 25-basis-point hike in April is not ruled out. Barclays has revised its terminal rate forecast to 6% for this hiking cycle and expects a shallow cycle overall. The RBI had earlier forecast crude oil prices at $95 per barrel for the second half of fiscal year 2027, but actual prices have risen to $105-110 per barrel. This price increase is causing inflation concerns, as India is a net importer of crude oil.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Two more interest rate hikes on cards economictimes.indiatimes.com
