(Bloomberg) -- The Reserve Bank of India will probably raise its policy rate by 50 basis points for a third straight meeting this week, according to DBS Bank Ltd. which revised its call from 35-basis-point hike.
DBS is the latest to join the camp of those forecasting a bigger hike in borrowing cost on Sept. 30, following a similar revision by Goldman Sachs Group Inc. last week after the Federal Reserve’s interest-rate increase and hawkish signal.
Citigroup Inc. last week also firmed up its forecast for a half-point increase and expects the RBI to change its stance to “neutral.”
DBS revised its call amid stubbornly high inflation and a shift in the global policy environment “which has narrowed the room for gradual and incremental moves,” economist Radhika Rao wrote in a note on Monday. “The central bank’s hawkish policy bias to continue this week.”
India’s central bank has raised the benchmark rate by 140 basis points in three moves since May to 5.40% to tame inflation running past its target ceiling.
Analysts from Citi, DBS and Goldman are among the seventeen predicting that RBI will raise the rate to 5.9% on Friday, according to a Bloomberg survey as of Monday where eight expect a 35-basis-point hike and one forecast a quarter-point increase.
©2022 Bloomberg L.P.
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