RBI set for fourth straight rate hike to quell inflation, say experts
The HinduThe Reserve Bank of India may take cues from its global counterparts, including the U.S. Federal Reserve, to raise interest rate for the fourth time in a row on September 30 to tame stubborn inflation. The RBI, which has since May raised the short-term lending rate by 140 basis points, may again go for a 50-bps increase to take it to a three-year high of 5.9%, say experts. While a hike of 25-35 bps would have signaled that the RBI is confident that the worst of inflation is over, the recent developments in the forex market could prompt a higher quantum of 50 bps to stay on track with other markets so as to retain investor interest,” he said. Aditi Nayar, Chief Economist, ICRA, too expects another ‘new normal’ 50 bps rate hike from the MPC in September 2022.