Exactly a fortnight ahead of the Reserve Bank of India’s (RBI’s) next monetary policy review, a key market indicator of interest rates – the overnight indexed swap (OIS) – suggests that the central bank may tighten policy by 35 basis points and then refrain from further rate hikes. RBI Deputy Governor Michael Patra recently described the OIS as the primary instrument for hedging interest rate risk in India. The six-member Monetary Policy Committee (MPC) of the RBI will meet on December 5-7.
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