The pickup in India’s economy has led to widespread expectations that interest rates will be left on hold at India’s monetary policy meeting this week and beyond, PTI reported. The Reserve Bank of India, the country’s central bank, is scheduled to announce its interest rate decision on Wednesday. “As the RBI is likely to paint a more optimistic picture of the economy, with expectations of growth strengthening further and consumer price index inflation slightly above its mid-point target of 4%, we expect the policy to be interpreted as a hawkish hold,” says Sonal Varma, the chief India economist at Nomura. The repo rate is currently at 6%. A rate cut is often made when economic growth is weak because cheaper lending can help spur the economy by allowing businesses to borrow more money to expand, for example. After slowing to a three-year low in the quarter between April and June, the latest figures have revealed that the GDP growth rose to 6.3% in the quarter to the end of September.
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