RBI Hikes Again, Economists Majority Expect 50 Basis Points Hike: Survey

There was broad consensus that the RBI would hike rates at his September 30th meeting, but there was some disagreement over how far the rate hikes would go if inflation accelerated to his 7% mark and the rupee weakened.

RBI may raise repo rate by 50 bps in monetary policy review

RBI may raise repo rate by 50 bps in monetary policy review : There was broad consensus that the RBI would hike rates at his September 30th meeting, but there was some disagreement over how far the rate hikes would go if inflation accelerated to his 7% mark and the rupee weakened. RBI may raise repo rate by 50 bps in monetary policy review : There were differences. The Reserve Bank of India is set to raise interest rates again next week, with a majority of economists expecting a 0.5 percentage point hike in a Reuters poll, while others expect a 35 basis point hike.

Economists see up to 50 bps rate hike by RBI

RBI may raise repo rate by 50 bps in monetary policy review : There was broad consensus on the RBI to hike rates at its Sept. 30 meeting, but disagreement over how far the RBI would go if inflation accelerated to 7% and the rupee weakened. . The RBI lags many of its global peers, despite year-round inflation above the high end of its 2-6% target range. Since May, it has raised interest rates in three stages, one of which was unscheduled, raising a total of 140 basis points, raising the benchmark repo rate to 5.40%. In a recent Reuters poll, economists were split into five sides as to what the RBI would do at its next meeting. Just over half of 26 out of 51 said the RBI would target a rate hike of 50 basis points for him, raising the repo rate to 5.90%. Another 20 forecasts an increase of 35 basis points.

RBI may raise repo rate by 50 bps in monetary policy review

The remaining five respondents were planning a more modest increase of 20-30 basis points. A weak currency is likely to make imports more expensive and sustain inflation longer. The survey also showed that inflation will remain above the RBI’s upper bound until the first quarter of 2023. GDP grew 13.5% year-on-year in the most recent quarter, making India the fastest-growing major economy in the world, but the pace of expansion halved to 6.2% this quarter and is expected to grow in the next two quarters.

One quarter was forecast to slow further to 4.4%. This may be one reason why the RBI has not kept pace with other major central banks. More than 60% of his analysts (23 out of 38) who responded to additional questions said slowing economic growth would play a bigger than usual role in his RBI interest rate deliberations through the end of the year. I was. Economists expect average growth of 6.2% and 6.5% over the next two years, the survey showed.