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India Signals End to Easing Cycle, Unexpectedly Holds Rates

  • RBI changes policy stance to neutral from accommodative
  • Forecasts sharp growth recovery in year through March 2018
Updated on

India’s central bank unexpectedly left borrowing costs unchanged for a second straight meeting and signaled that its interest-rate easing cycle is coming to an end.

The benchmark repurchase rate was left at a six-year low of 6.25 percent, the Reserve Bank of India said in a statement in Mumbai on Wednesday. The move was predicted by just five of 39 economists in a Bloomberg survey, while the rest saw a cut to 6 percent. The central bank forecast a sharp recovery in growth during the year through March 2018, helped by a rebound in consumption that has been hurt by Prime Minister Narendra Modi’s unprecedented cash ban.