Reserve Bank of India seen holding rates this week - Reuters poll

According to the latest Reuters poll of economists, a majority of them see the Reserve Bank of India (RBI) leaving the benchmark interest rate on hold this Wednesday, despite an increasing number of economists expecting a June RBI rate hike.

Key Findings:

“In a snap poll of 56 economists taken after gross domestic product (GDP) data on Thursday, 26 of those respondents, or about 46 percent, expect the RBI to take the repo rate higher at the June 6 meeting. 

That compares with 21 of 57 economists, or about 40 percent of them, in a poll taken before the GDP data was published.

While most economists in the latest Reuters poll expect the repo rate to remain at 6.00 percent on Wednesday, a majority forecast the RBI to raise it by 25 basis points to 6.25 percent in August.

The RBI may use the June meeting to shift its policy communication to an explicit tightening bias away from the neutral bias it has held since February last year.

But for many, June meeting’s decision is a very close call.”