ING economists forecast the Reserve Bank of India will maintain its repo rate as core inflation stays below target despite fuel-driven price pressures.
ING economists anticipate the Reserve Bank of India will keep its repo rate unchanged at 5.25% in its upcoming decision. The forecast follows June’s headline inflation rise, driven by higher fuel prices, though core inflation remains below the central bank’s target.
Core inflation continues to run below the RBI’s objective, giving policymakers space to hold rates steady. However, risks from elevated oil prices and a potential severe El Niño event could pressure food prices, warranting close monitoring.
The RBI is expected to prioritize stability while assessing inflation risks, with no immediate market reaction reported in the outlook.