While markets are pricing in steep rate hikes by the Reserve Bank of India (RBI) in the near future, Nomura suggested that this cycle is fundamentally different and expects policy fine-tuning instead, with the international brokerage seeing a higher chance of a cumulative 50 bps rate hike.
The RBI is set to hold its Monetary Policy Committee (MPC) meeting next week from October 5 to October 7. Nomura, in its latest report, noted that the Indian central bank’s monetary policy is at an inflection point. While India has so far sidestepped the rate hikes seen in other Asian economies, higher oil prices, a surge in food prices and Fed rate hikes have brought the RBI's monetary policy to this point.
