Citibank no longer predicts that the Reserve Bank of India will raise interest rates in this fiscal year.

Research analysts at Citigroup wrote in a report that the bank no longer expects the Reserve Bank of India to raise interest rates in the current fiscal year. Citigroup had previously predicted two rate hikes, each 25 basis points. If the US-Iran agreement is maintained, the Reserve Bank of India will not need to worry about energy shocks, giving it some room to mitigate the weather impact from El Nino. Citigroup believes there is a downward risk of 40 basis points in the inflation forecast of the Reserve Bank of India, and the second-round effects of supply-side shocks may now be more moderate. "If the Middle East ceasefire agreement breaks down, or if El Nino disrupts inflation expectations, we will consider restoring our expectations for rate hikes by the Reserve Bank of India," Citigroup stated.