Interest rate may come down !!!!

will it be the last rate hike of the current cycle?

posted by NILESH WAGHELA 

MumbaI: The Reserve Bank of India is likely to raise the repo rate by 25 basis points or 0.25 % on April 6 as inflation continues to remain above its comfort zone of 6%, as retail inflation above RBI's comfort zone.

However, some economist expect Interest rates to come down after that. 

A poll of economists conducted by news agency Reuters indicated that the RBI would hike rates in the upcoming policy review and then pause for the rest of the year. But will that be the central bank's last rate hike of the current cycle?

According to economists, it is likely that the central bank would leave room for future hikes, given the evolving inflation trend in India and around the globe.

Retail inflation has remained above the RBI’s upper tolerance band of 6 per cent for two straight months. While it reached 6.52 per cent in January, it only cooled off slightly to 6.44 per cent in February. This is why the central bank will hike rates again, at least till it manages to tackle the high core inflation.

A majority of the polled economists said the RBI would lift its repo rate by 25 basis points to a seven-year high of 6.75 per cent at its next monetary policy review in April. Another 25 basis point hike would take the cumulative hike since May last year to 275 basis points.