Budget impact: RBI may keep policy rates unchanged, talk tough on inflation

The Reserve Bank of India (RBI) is likely to keep its policy rate on hold this week, but could toughen its warnings against inflation, economists say, laying the ground for a hike in 2018 after prices accelerated at the fastest pace in 17 months. The central bank has already been warning that inflation would return, ending a period of historically low levels that let it cut the repo rate by 2 percentage points to the current 6.

0 percent over the past two years. But the RBI, whose two-day policy review ends on Wednesday, is worried.

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