RBI Rate Hike In December Likely As Inflation Crosses 6%, ICICI Bank Warns Food Prices May Stay Elevated
Mumbai: Indian households could face continued pressure from rising food prices over the coming months, with ICICI Bank forecasting further inflationary risks and two interest rate hikes by the Reserve Bank of India (RBI). According to a report, the bank expects the RBI to increase the repo rate by 25 basis points each in December 2026 and February 2027 to bring inflation closer to its target. El…
Mumbai: Indian households may experience ongoing pressure from increasing food prices, according to ICICI Bank. The bank predicts the Reserve Bank of India (RBI) will raise the repo rate by 25 basis points in December 2026 and again in February 2027 to bring inflation under control. El Niño and uneven monsoons could push India's food inflation higher in fiscal year 2027, keeping the RBI open to further interest rate hikes.
Retail inflation reached 6.08% in October, surpassing the RBI's upper limit of 6%, with food inflation rising to 8.9% from 7.7% and headline core inflation at 4.5%. ICICI Bank warns that food prices may continue to rise, citing factors like weaker kharif harvests, lower reservoir levels, and insufficient soil moisture affecting the upcoming rabi crop.
Food inflation is expected to stay elevated over the next few quarters before easing in the second half of fiscal year 2028.
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