India: RBI likely to keep the repo rate on hold – TDS

Analysts at TD Securities expect the RBI to keep the repo rate on hold at 6.50%.

Key Quotes

“At the 5 October meeting the RBI shifted its stance from “neutral” to “calibrated tightening”. CPI dropped in October to a very comfortable 3.31%, aided by declining food and clothing prices while in contrast fuel prices continued to move higher. Fuel prices have moved lower in November while food price inflation remains contained.”

“Moreover, a high base from last year points to lower inflation rates in the new few months before picking up again in February 19. Taken together with a firmer INR, RBI is unlikely to feel any pressure to tighten policy.”