From Financialexpress · Kshipra Petkar · · 1m 20s
Economists Predict RBI Rate Hike Amid Inflation Risks
Economists say RBI may raise rates 25 bps to 5.50% as inflation risks grow.
In brief
Economists say RBI may raise rates 25 bps to 5.50% as inflation risks grow. 80% of economists expect RBI to hike repo rate by 25 bps to 5.50% due to rising inflation and strong GDP growth. Originally reported by Financialexpress.
Economists Expect RBI Rate Hike
80% of economists polled expect RBI to raise repo rate by 25 bps to 5.50% due to rising crude, food inflation, and strong GDP growth.
MPC Meeting Approaches
The Reserve Bank of India’s Monetary Policy Committee will meet from October 5-7 with policy decision on October 7.
Inflation Risks Rise
Retail inflation rose to 4.8% in August from 4.45% in July with elevated crude oil prices and El Niño pressures.
GDP Growth Exceeds Projections
GDP expanded 7.8% in April-June quarter exceeding RBI’s earlier projection and giving central bank room to respond.
Economists' Views on Rate Hike
80% of economists expect 25-bps rate hike while 60% bet on neutral stance and others point to calibrated tightening.
Rate Hike Projections
Barclays, Nomura, and Goldman Sachs expect 25-bps hikes in October and December with Nomura seeing pre-emptive recalibration.
RBI Rate Hike Concerns
Madan Sabnavis expects RBI to keep rates unchanged as inflation remains at 4.8% before festival season.
The essence
80% of economists expect RBI to hike repo rate by 25 bps to 5.50% due to rising inflation and strong GDP growth.
