Cooling prices provide RBI room to gradually raise interest rates.

 

On Wednesday, India's central bank will likely start reducing the rate at which interest rates are raised, indicating that the aggressive tightening cycle is about to come to an end.

The six-member Monetary Policy Committee, headed by Governor Shaktikanta Das, has several reasons to switch to smaller steps after raising rates by 190 basis points this year, including three half-point adjustments. Inflation is falling off a peak and economic growth headwinds are getting stronger.

In a Bloomberg survey of 35 economists, 29 forecast a 35 basis point increase in the benchmark repurchase rate, three predict a quarter-point increase, and one each predicts a 10-, 30-, and 50 basis point increase.

On Wednesday, Das will give a webcast announcement of the rate decision at 10 a.m. in Mumbai and hold a news conference at 12 p.m.