According to a Reuters poll of economists, the Reserve Bank of India (RBI), the Indian central bank, is expected to deliver the third consecutive rate cut at its June monetary policy meeting.
Key Findings:
“Two-thirds of 66 economists predicted the RBI to cut its repo rate by 25 basis points at its June 4-6 meeting, bringing it to 5.75% – the lowest since July 2010. It is then expected to keep policy on hold at least until the end of next year.
The last time the central bank cut rates three times in a row was in 2013.
The latest Reuters poll results, taken May 23-28, were significantly different from a poll conducted just a month ago, where economists expected the RBI to hold rates at the current 6.00% until at least October 2020.
Of the nearly 60 contributors who had a view on RBI rate policy this year, just under half had rate forecasts ready for 2020. A majority of that sample said rates will be on hold until the end of next year after a cut next month.
However, when asked what the RBI should do this year, rather than what it would do, economists were split, with 19 contributors saying it should hold rates and 18 saying it should ease. Only one economist said it should raise rates.
Nearly three-quarters of 39 economists who answered a separate question said the RBI’s independence would remain unchanged over the coming months. Eight said it would be somewhat diminished and two said it would be somewhat enhanced.”
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