SBI Economists Cut December RBI Rate Hike Forecast to 25 Basis Points

State Bank of India’s Economic Research Department has cut its forecast for the Reserve Bank of India’s December rate hike to <b>0.25 percentage point</b>, from 0.50 percentage point. The department attributed the revision to improved external conditions, renewed foreign fund inflows and easing pressure on the rupee. SBI Research said inflation is expected to remain above 6% in November before moderating. Its note put the probability at 50:50 that the December increase will be the final hike in the current cycle, and said the terminal repo rate could be 5.75%. The RBI raised its benchmark rate to 5.50% in October.