India: RBI kept rates steady - BBH

Research Team at BBH, notes that the Reserve Bank of India kept rates steady at 6.5%, as expected. 

Key Quotes

“The RBI said that its inflation forecasts are retained, but with an “upside bias.”  Both CPI and WPI inflation have been ticking higher, which clearly warrants caution ahead of the monsoon season. 

Until the inflation outlook is clearer, the RBI is likely to remain on hold.  Governor Rajan would not comment on reports that he does not intend to return for a new term is concerning, as he is well-respected by the markets.  We expected Prime Minister Modi will do his best to keep him on, but some of his allies want a more dovish choice.”