India`s inflation likely to rise, interest rates won`t

The Reserve Bank of India is likely to leave interest rates unchanged at its December policy meeting and through the end of next year, despite expectations that inflation will breach its 4 percent target in the next few months, a Reuters poll showed. 

The results, from a poll of economists taken over the past week, also found there is a bigger risk the next move is a cut, even though forecasts diverge in three directions starting from the second quarter of next year. That suggests both that policymakers have little room for manoeuvre and the outlook for rates beyond the next few months is exceptionally fuzzy, with several respondents saying they were unwilling to look much beyond the turn of the year. 

The poll comes at a possible turning point for Asia's third- largest economy, with a separate Reuters survey showing economists now expect a rebound in economic growth after five consecutive quarters of deceleration.


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