RBI may raise policy rates by 25bps on Friday, say economists
Live MintThe Reserve Bank of India’s monetary policy committee may raise policy rates by 25 basis points on Friday, for the third time this year, along with a change in stance to a hawkish one, amid surging crude oil prices and weakening rupee. Since the last policy in August, the upward pressure on RBI’s 4% inflation target has increased with rupee depreciating by 5.5% and oil prices rising by 13%. “We expect RBI to emphasize on the forward-looking nature of monetary policy, as high oil prices and a weak rupee risk hardening inflationary expectations and disrupt the benign inflation outlook. In the previous policy, MPC members reasoned that inflation will increase in the second half of the year, given uncertainties around the implementation of the minimum support price and crude oil prices.