By Martin Shwenk Leade
Copyright indiatimes
The Reserve Bank of India will keep its key interest rate at 5.50% on October 1 and for the rest of the year, according to a Reuters poll of economists, as the central bank gauges the impact of past rate cuts on the economy. Thanks to heavy government spending, India’s economy grew a stronger than expected 7.8% year-on-year last quarter. Meanwhile, private investment continues to lag, suggesting the RBI’s measures to ease policy haven’t fully filtered through the economy yet. While inflation in Asia’s third-largest economy has stayed within the RBI’s 2-6% target since November, the rupee has weakened against the U.S. dollar and has the potential to change that by making imports more expensive. Global risks are adding to uncertainty. Trade tensions with the United States and new visa criteria have clouded the economic outlook, pushing the rupee to record lows and prompting investors to pull out of Indian assets. The Monetary Policy Committee, which unanimously decided to hold rates in August, will maintain that call at its September 29-October 1 meeting, according to a near three-quarters majority of economists, 45 of 61, in the September 19-24 Reuters poll. The remaining 16 predicted a 25-basis-point cut.Live Events “I don’t expect any rate cut because the RBI has already made its stance very clear that monetary policy has only a limited impact on pushing the growth rate,” said Madhavankutty G, chief economist at Canara Bank. “Private capex has not yet started picking up because wage growth has been fairly stagnant and there are also concerns about job stability.” That caution showed in forecasts with a slim majority of economists, 26 of 50, expecting rates to remain unchanged until at least the end of 2025, a shift from an August poll when most predicted at least one cut by year-end. The median forecast now shows a 25-basis-point reduction in the first quarter of 2026, though there was no clear consensus beyond that.Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our Economic Times WhatsApp channel)
Read More News onRBI MPCRBI interest ratesReserve Bank of Indiamonetary policyIndia economic growthinflation in Indiaeconomic outlook IndiaCanara Bankmonetary policy committeecanara bank
(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless
(You can now subscribe to our Economic Times WhatsApp channel)Read More News onRBI MPCRBI interest ratesReserve Bank of Indiamonetary policyIndia economic growthinflation in Indiaeconomic outlook IndiaCanara Bankmonetary policy committeecanara bank(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless
Prime ExclusivesInvestment IdeasStock Report PlusePaperWealth Edition123View all Stories
