The Reserve Bank is likely to keep interest rates unchanged in its annual monetary policy next week even as inflation has moderated, said HSBC country head Naina Lal Kidwai.
Although inflation has eased both in terms of consumer price index and food, the RBI would look at other factors including the exchange rate, she said on the sidelines of an event here.
“It would be quite a tough call for the RBI in the given scenario…I expect the RBI to maintain status quo,” Kidwai said.
“Ideally I would like RBI to cut interest rate but it would have its own compulsions,” she said.
Besides, outlook on inflation, the central bank would also take into account the strengthening rupee and its impact on exports.
The RBI is scheduled to announce its annual monetary policy for 2014-15 on April 1.
In its third quarter review of monetary policy, the Reserve Bank of India (RBI) in January raised the key repo rate by 0.25 per cent to 8 per cent in a bid to curb inflation. The central bank’s move was expected to translate into higher equated monthly installment (EMIs) and push up borrowing costs for corporates.