Reserve Bank of India (RBI) governor Raghuram Rajan may want to chase the monsoon before he pulls the trigger on interest rates.Rain-fed agriculture in India makes the country heavily dependent on rains for its food prices to remain benign and keep consumer price-led inflation low. With prices of vegetables and pulses already soaring, the RBI would rather go with caution, letting nature do its bit before tinkering with interest rates. The RBI’s monetary policy review is on June 7.<!– /11440465/Dna_Article_Middle_300x250_BTF –>The higher-than-expected GDP growth of 7.9% in the three months ending March 2016 over the preceding year will give a breather to the governor to hold on to rates until the next policy review on August 9.Official job data from the US is sending shock waves globally. While everyone was expecting a revival in the US economy, data showed that employers added just 38,000 jobs last month, the slowest growth in six years and way below the 160,000 that was expected. So, the US Federal Reserve hiking rates in its meeting this month is a remote possibility unless there is some anomaly with the job data figures.With too many uncertainties lurking, economists expect a status quo from the RBI with the hope of reduction in interest rates in August when rains would have shown their generosity and the two meetings of the Federal Open Market Committee (the rate deciding body in the US) would have made up its mind on whether interest rates in the US need to be raised.Pranjul Bhandari, chief India economist, HSBC, said, “India’s summer is laden with suspense.” She says several things would play up in the minds of the regulators like whether the Fed will hike rates, oil prices will continue to rise or if we would get sufficient rains to contain food prices.The RBI cut the rate at which it lends to banks by 0.25% to 6.50%, the lowest in over five years when it unveiled the first monetary policy of the financial year in April. But with retail inflation rising higher than expected to 5.39% in April, after having slowed down for three months in a row from January, the RBI will be bound to be cautious.Saugata Bhattacharya, chief economist, Axis Bank, said there are “too many uncertainties for the RBI to consider. Today’s non-food payroll data in the US was a case in point, which showed just 38,000 job additions when the expectation was 158,000. It may be an anomaly but the Fed is certainly not going to hike rates in the June meeting. In India, rains, oil and food prices are a big worry. So the RBI would prefer to wait and watch, before bringing down rates.””We expect RBI to be in a wait-and-watch mode in the June 7 policy meeting. We continue to hold on to our call for a 25 bps rate cut in August, on the back of our assumption that early rains will be adequate. By then, most of the other summer questions should have also found an answer,” Bhandari added.Siddhartha Sanyal, chief economist, Barclays India, said: “We think the RBI has relatively few ‘rate cut bullets’ left in the near term, given the 1.5% reduction in the repo rate (to 6.5%) since January 2015. In our view, the RBI is likely to continue to monitor the transmission of previous easing measures, developments on the inflation front, and this year’s monsoon before cutting the repo rate further. A clearer picture should emerge before the August policy meeting. Given the recent upside surprise in inflation and the uptick in commodity prices, we expect the tone of the RBI’s commentary next week to be balanced. In the meantime, we expect the central bank to emphasise its continued commitment to support the banking system’s liquidity needs.”

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RBI may not hike interest rates on June 7