The global financial services company says there’s a 40 per cent chance of a 25 basis points hike by RBI in its June 4-6 meeting.
Resevera Bank of India is set to announce its bi-monthly policy statement next week and the speculations are high if the central bank will raise interest rates.
Global firm UBS says there’s a 40 per cent chance of a 25 basis points (bps) hike by RBI in its June 4-6 meeting.
“We assign a 40 per cent probability that the MPC will pre-emptively hike rates by 25 bps in the June policy meeting,” the firm was quoted as saying.
The global financial services company cited suggestion by two of the six MPC members, who expressed their willingness to vote in favour of a 25 bps hike in June meeting.
As per UBS, the central bank will be under pressure to hike rates, given rising crude oil prices and the country’s inflation dynamics.
“Brent prices are up 48% on-year, the 11th-largest YoY oil spike in 70 years,” UBS said.
The firm expects the MPC to hike rates by 50bps in the rest of FY19 starting from its August meeting.
In its April statement, the Reserve Bank of India (RBI) had kept the policy repo rate unchanged at 6.0 per cent.
The MPC, then had, said the decision was consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.
Source: Media reports