Changed Expectations after RBI’s Surprise Move

Expectations for monetary policy have shifted towards further tightening after the Reserve Bank of India’s surprise increase in the policy interest rate on Friday, a new Reuters poll shows.

Economists are now split over whether new RBI chief Raghuram Rajan will hike rates again at the central bank’s next policy review on October 29.

Nearly half of those economists surveyed, 16 of 31, expect Rajan to leave rates on hold at the meeting, while 15 expect a further 25 basis point (bps) increase, which would bring the policy rate to 7.75 percent.


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