Faltering rupee makes RBI to raise rates next week

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New Delhi: The Reserve Bank of India is likely to raise interest rates in early October, despite relatively tame inflation, to prop up a retreating rupee, according to a Reuters poll of economists who also trimmed their near-term growth forecasts.
In an abrupt change from the last survey conducted two months ago, which predicted rates would stay on hold until this quarter next year, two-thirds of 61 economists polled Sept. 19-25 said the RBI would lift the repo rate at least once by year-end.
Slightly over half said RBI Governor Urjit Patel and the Monetary Policy Committee would deliver a 25-basis-point rise to 6.75 percent at the Oct. 5 policy meeting, with one economist calling for a 50-basis-point rise.
The predicted rate hike would be the RBI’s third this year, having lifted borrowing costs in June and August. The US Federal Reserve is forecast to raise rates this week – its third this year – according a separate Reuters poll.

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