Like Indonesia, India's central bank may hike rates to defend its currency
India's central bank may consider raising interest rates to defend the depreciating rupee, contrary to expectations of keeping rates unchanged. While most economists predict a hold at 5.25%, some believe a hike could occur to align with global trends and address currency pressures. The Indian rupee has faced significant challenges, prompting government measures to stabilize it.
- ▪The Reserve Bank of India is expected to meet on Friday to discuss interest rates.
- ▪Most economists anticipate the benchmark rate will remain at 5.25%, but some suggest a hike may be necessary.
- ▪The Indian rupee has been under pressure due to rising import costs and capital outflows.
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India's central bank may defy expectations that it will leave its benchmark interest rate unchanged during its monetary policy decision meeting on Friday.The majority of economists polled by CNBC expect the Reserve Bank of India to keep rates unchanged at 5.25% while signaling a rate hike may only occur towards the end of the year. A minority expect policymakers to act at this week's meeting in a bid to anchor the rupee, which has depreciated to record lows against the dollar. CNBC conducted a poll of nine economists over the past week, in the run-up to the RBI policy decision.But it is "more logical," for India's central bank to chart a different course and raise interest rates, said Venugopal Garre, managing director and head of India research at Bernstein, speaking on CNBC's Inside…
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