62 of 67 economists see RBI keeping repo rate on hold on Dec. 6
Five expect 25 bps rate cut

BENGALURU, Nov 28 Reuters The Reserve Bank of India RBI is set to hold interest rates on Dec. 6 as a sharp rise in consumer inflation has led several economists in a Reuters poll to push back their forecasts for the first cut in the cycle by a couple of months to February.

Annual retail inflation surged past the RBI39;s 6 tolerance ceiling in October, driven by soaring food prices. RBI Governor Shaktikanta Das, whose term is likely to be extended, recently said any premature move to lower rates would be risky.

This was despite the RBI changing its monetary policy stance to 39;neutral39; in October and calls from top government ministers to cut interest rates to support a slowing economy.

A strong majority of economists, 62 of 67, in the Nov. 1827 Reuters poll predicted the RBI would hold its key repo rate at 6.50 at the end of its Dec. 46 meeting. Five forecast a 25basispoint bp cut.

This marked a shift from expectations in a poll conducted last month, where a slim majority of economists anticipated a cut to 6.25 in December.

If Governor Das stays on … policy loosening is not on the cards for the time being. Das has been one of the more hawkish panel members in recent months, said Shilan Shah, deputy chief emerging markets economist at Capital Economics.

That all said, there is growing evidence that the economy is cooling and we still think that inflation will drop back…