Reserve Bank lifts India’s policy rate to 6.5%

NEW DELHI - The Reserve Bank of India (RBI) has raised its policy repo rate to 6.50% while retaining a neutral stance. ANZ Bank comments that the neutral stance implies that future policy actions will be data dependent.

The central bank made only minor adjustments to its inflation forecasts. The GDP forecast for FY2019 (fiscal year ending March 2019) was kept at 7.4%.

ANZ says a more notable change was that the RBI now holds the view that risks to inflation have become more balanced. In the previous assessments, the emphasis was on upside risks.

“We believe further rate hikes are unlikely in the remainder of 2018. A 25bp hike is, however, likely in Q1 2019.  www.live.anz.com (ATI).