New Delhi, Aug. 6 -- The Reserve Bank of India (RBI) is likely to keep the terminal rate at 5.5 per cent for some time in the near-term, asserted Bank of Baroda Economist Jahnavi Prabhakar, citing the central bank's guidance that future actions will be data dependent and on basis of ongoing development on external front, related to uncertainty due to trade negotiations.

RBI Governor has also cautioned today of a hawkish pause, signalling there is limited room for further easing in interest rates.

At most, the next rate cut could be likely in Q3 2025-26, the Bank of Baroda Economist wrote in a report. However, since the inflation forecast for both Q4 2025-26 and Q1 2026-27 is above the 4 per cent mark, the chances of a rate cut have dimi...