RBI’s Next Move Too Close to Call

The Reserve Bank of India’s next policy move will be a “very close call” with economists split over whether the central bank will cut interest rates for the third time in four months when it meets on Tuesday.

Governor Raghuram Rajan has kept markets on their toes this year, with two off-cycle rate cuts in January and March totaling 50 basis points. The benchmark repo rate currently stands at 7.5 percent.

While the RBI prefers front-loading policy easing, recent inflation developments complicate things, said Devika Mehndiratta, senior economist, South Asia & ASEAN at ANZ.