Economics
Emerging-Market Slide Pressures Indian Central Bank on Rates
- Corporate bond yields, bank lending rates are already rising
- RBI risks falling behind the curve if they don’t hike: Oxford
This article is for subscribers only.
An emerging-market selloff that’s hit India hard presents its central bank with a dilemma: hold interest rates steady to keep the economy motoring or follow the example of the Philippines and Indonesia by raising them to stem market pressure.
The rupee has dropped about 5 percent against the dollar this year and yields have spiked on government and corporate bonds. While those moves would argue for a rate increase, most economists aren’t convinced it will come on Wednesday. Of the 41 surveyed by Bloomberg, 27 predict the monetary policy panel will leave the benchmark repurchase rate at 6 percent.