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Cooling prices give RBI space to slow interest-rate hikes

After 190 basis points of rate increases this year, including three half-point moves, the six-member Monetary Policy Committee led by Governor Shaktikanta Das has more than one reason to switch to smaller increments: inflation is coming off a high and headwinds to economic growth are increasing.

December 06, 2022 / 08:18 AM IST
RBI Governor Shaktikanta Das

RBI Governor Shaktikanta Das

India’s central bank will probably start slowing the pace of interest-rate increases on Wednesday, signaling it’s near the end of its aggressive tightening cycle.

After 190 basis points of rate increases this year, including three half-point moves, the six-member Monetary Policy Committee led by Governor Shaktikanta Das has more than one reason to switch to smaller increments: inflation is coming off a high and headwinds to economic growth are increasing.

Rupee gains, forex reserves rise in the last few weeks

Twenty-nine of 35 economists in a Bloomberg survey predict the benchmark repurchase rate will be raised by 35 basis points, three see a quarter-point move, while one each expect a 10-, 30- and 50-basis-point action.