Business · India Bureau
Global banks predict RBI rate hike in October as inflation pressures mount
Major international financial institutions are anticipating the Reserve Bank of India will raise its benchmark repo rate by 25 basis points at its October monetary policy meeting. The move would reflect growing concerns over inflation trajectory in the coming months.
LSN India ·
Leading global banks including HSBC and JPMorgan Chase are signalling expectations for a 25 basis point rate increase at the RBI's monetary policy committee meeting in October, which would lift the repo rate to 5.5 per cent. Both institutions see the central bank maintaining its tightening bias through year-end, with projections for an additional 25 bps hike in December.
The anticipated rate actions reflect mounting inflation concerns. Analysts at these institutions forecast that inflation will accelerate to approximately 5.5 per cent in September from 4.8 per cent recorded in August, squeezing the RBI's policy space and increasing pressure for monetary tightening.
The hawkish guidance from the RBI is expected to be a focal point of the October announcement, as policymakers signal their commitment to containing price pressures. The central bank faces a delicate balancing act between supporting economic growth and managing inflation expectations, particularly as external factors and domestic demand dynamics continue to evolve.
Market participants will scrutinise the RBI's communication closely for signals on the trajectory of future rate decisions and the overall stance of monetary policy in the coming quarters. The inflation outlook and growth considerations will remain central to the central bank's assessment at its next policy review.