India's Central Bank Likely to Maintain Repo Rate at 5.25%

India's central bank is expected to keep its policy repo rate unchanged at 5.25% on Friday, according to a survey by The Wall Street Journal. Of the 11 economists surveyed, nine anticipate no change, while two predict a 25 basis point increase to 5.50%. According to Jin10, ANZ economist Dhiraj Nim suggests that a rate hike might be justified due to ongoing depreciation pressure on the rupee and the potential for inflation to exceed the central bank's 6% tolerance later this year. However, Citi Research analysts note that the central bank has previously expressed a willingness to wait for second-round inflation effects before taking action, with interest rate measures being a last resort to defend the currency. Economists from Bank of America believe that although the case for a rate hike is building, there is currently no room for a significant rate increase to stabilize the rupee.