Analyst forecast 35 bps rate hike in June 2022
Analysts expect the Reserve Bank of India (RBI) to increase rates once again in its upcoming policy meeting in June 2022. In a poll of nearly 53 economists conducted by Reuters, 14 analysts expected the apex bank to raise rates by 35 basis points (bps) to 4.75 per cent, while 20 expected a larger move ranging from 40-75 basis points, including ten who projected a 50 basis point hike. Nomura has predicted the RBI to raise rates by 35 bps in June, followed by 50 bps in August and 25 bps at subsequent meetings until April 2023. It expects the repo rate to touch 5.75 per cent by December 2022 and 6.25 per cent by April 2023. Kotak Mahindra Bank’s senior economist Upasna Bhardwaj has forecast a 35 bps hike by the RBI. Economists at State Bank of India (SBI) expect the RBI to hike rates by another 0.75 per cent to get the repo rate back to the pre-pandemic level of 5.15 per cent by August 2022. As per their study of the Russian invasion’s impact on inflation, 59 per cent of the jump in prices is due to geopolitical events.