The Monetary Policy Committee (MPC) raised repo rate by 50 basis points to 5.4%, while continuing with its stance of “withdrawal of accommodation". So, how do we see growth, inflation and interest rates from here? With the 50bps rate hike, MPC has now raised interest rates by 180bps, including the 40 bps move due to the operating rate moving from reverse repo to repo in April. With a projected growth rate of 7.2% for FY23, India will be the fastest growing large economy. We continue to believe that RBI will raise terminal repo rate to 6% over the next two policies, and can then pause to reassess growth and inflation dynamics.

Source: Mint August 07, 2022 11:11 UTC