MUMBAI (Reuters) – The Reserve Bank of India is expected to keep key rates unchanged this week, but may for the first time since February provide guidance on how the economy is performing amid the coronavirus pandemic.
All 66 respondents in a Reuters poll expect the repo rate
to remain unchanged at 4.0% after its policy review on Thursday, and a large majority see no cuts until the January-March quarter. The RBI will then likely stay on hold until the end of 2021.
The central bank must manage high retail inflation while keeping policy accommodative to support an economy which nosedived 23.9% last quarter, the weakest performance on record.
It has so far slashed rates by 115 basis points in response to the COVID-19 pandemic since late March.
“India’s inflation-constrained central bank is unlikely to deliver a rate cut, and we expect all policy rates to stay unchanged,” said