RBI likely to keep repo rate unchanged - TDS

Analysts at TD Securities are expecting the RBI to keep its repo rate unchanged at 6.50% but change its stance to “neutral” from “calibrated tightening”.

Key Quotes

“While there is a risk of a rate cut under new governor Das, we think it may be premature for the RBI to ease at this time, even if high frequency growth indicators have softened.”

“Admittedly headline CPI inflation has fallen to an 18-month low, near the bottom end of the RBI’s inflation target. However, core CPI remains elevated and could feed into inflation expectations while pre-election government spending may also fuel inflation pressures.”