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The Reserve Bank of India will hold its key interest rate steady at 6.50% on Feb. 8, according to economists polled by Reuters who expected the central bank to keep rates unchanged until at least July, longer than some developed market central banks.

After hiking its repo rate by a cumulative 250 basis points - much less than most of its major peers - the RBI has kept it untouched since February 2023 as inflation largely remained within the bank's 2%-6% target range.

A few weeks ago, RBI chief Shaktikanta Das expressed confidence current monetary policy could bring inflation back to its 4% medium-term target.

But with inflation close to the upper band of the target range and India holding onto its title of fastest-growing major economy, a rate cut is unlikely anytime soon.

All but one of the 60 economists in the Jan. 10-Feb. 1 Reuters poll expected the central bank to hold the repo rate at 6.50% at the conclusion of its Feb. 6-8 meeting.

A near two-thirds majority - 41 of 60 economists - predicted the central bank would keep the rate unchanged until at least the third quarter, compared to expectations the U.S. Federal Reserve would lower its key interest rate next quarter.

"We expect the RBI to keep rates on hold next week. Rate cuts will likely only begin in the second half of 2024 as headline inflation stabilises nearer to the 4% target midpoint," said Aditi Raman, associate economist at Moody's Analytics.

"While there is a risk of inflation breaching the 6% upper limit, the RBI is likely to monitor commodity and food prices closely."

Although there was no clear consensus around the timing of the first rate cut, a significant minority, 25 of 56, forecast the easing would start in the third quarter. Only 18 of those expected the first cut before July.

Those expectations were despite inflation mostly predicted to remain above 4% this year and next.

"The RBI finds itself in a reasonably comfortable position... the economy continues to be in a Goldilocks phase, with growth broadly steady, seemingly without resulting in demand-side inflationary pressures, yet," noted Rahul Bajoria, chief EM Asia economist at Barclays.

The economy was forecast to grow 6.9% this fiscal year and 6.3% in FY 2024-25, a separate Reuters poll showed.

In her latest annual budget speech, Finance Minister Nirmala Sitharaman said India would reduce its budget gap sharply in fiscal year 2024-25 and focus on infrastructure and long-term reforms to drive growth.

The government reduced its fiscal deficit target to 5.1% of GDP in 2024-25 from 5.8% this year.