RBI LIKELY TO TAKE HAWKISH STANCE: POLL

Bengaluru, MArch 30: The RBI will keep monetary policy steady at its April meeting but shift to a hawkish stance by the end of this year and raise interest rates early in 2019 as inflation pressures build, according to a Reuters poll.

All 61 economists polled between March 23-28 expected the RBI to hold the repo rate at 6.00 per cent and the reverse repo rate at 5.75 per cent at its April 4-5 policy meeting.

The RBI is expected to keep rates steady for the rest of this year

After a slowdown in growth through much of last year, India is on an upswing and reclaimed top spot as the fastest growing major economy in the final quarter of 2017, outpacing China.

Inflation on the other hand has eased slightly, but still projected by RBI to remain above its 4 per cent medium-term target in 2018.

“The recent strength of the economy has belatedly shifted discussion from whether the RBI might cut policy rates again to whether it should hike,” noted Shilan Shah, senior India economist at Capital Economics.

The RBI is expected to change its stance toward policy tightening by year-end, according to 60 per cent of 33 economists, including four respondents who thought the shift would come as early as its June meeting. — Reuters

INFLATION ON the other hand has eased slightly, but still projected by RBI to remain above its 4% medium-term target.