Interest rates rise as expected, more hike possible in current fiscal year: analyst

New Delhi, September 30 (PTI) The Reserve Bank’s decision to raise interest rates by 0.50% is in line with expectations and a hike of 0.50-0.60% can be made over the course of the current exercise. Analysts expressed this opinion.

The Reserve Bank of India (RBI) has further raised the repo rate by 0.50%, saying inflation based on the consumer price index (CPI) will remain at around 6% in the second half of the current exercise.

Dipanvita Majumdar, Economist at Bank of Baroda, said: “Inflation concerns will remain elevated due to the recovery in seasonal food prices and demand. We estimate that the inflation rate will peak at 6.5%. There may be an increase of 0.50 to 0.60%.

The central bank raised the key rate by 0.5% to 5.9% during Friday’s bi-monthly monetary policy review. Overall, since May, the RBI has increased the repo rate by 1.90%.

Upasana Bhardwaj, Chief Economist, Kotak Mahindra Bank, said the rupiah is likely to remain under pressure given the unfavorable global conditions and therefore there is a need for further interest rate hikes.

He said the MPC could take another 0.35% rise at the December meeting.

The rupiah has so far depreciated 7.4% against the US dollar in the current financial year amid the Russian-Ukrainian war and the slowdown in several major economies.

HDFC Bank Chief Economist Sakshi Gupta said the RBI had raised the key rate by 0.50% as expected in line with aggressive rate hikes globally.

V Swaminathan, Executive Chairman of Andromeda Loans, said that in such a situation, the cost of borrowing would increase. For this reason, banks and other financial institutions will have to increase their lending rates, which will increase the monthly installment (EMI) than before.

“Rising interest rates will lead to higher mortgage rates. At times like these, people who take out home loans need to think and think very carefully.

Commenting on consumer loan rates, Adil Shetty, CEO of, said: “For existing borrowers, all variable interest rate home, auto, personal and education loans may become more expensive. Will go.

Siddharth Sanyal, Chief Economist and Head of Research, Bandhan Bank, said RBI’s remarks were fairly balanced and global risks were widely discussed.

He said the central bank seemed confident about the growth pace of the Indian economy in the coming months.

Managing Director (MD) and CEO of Tata Capital, Rajiv Sabharwal, said the RBI’s decision will help improve foreign capital inflows to cushion rising inflationary pressures and halt the depreciation of the rupiah against the US dollar.

Nish Bhatt, Founder and CEO of Millwood Cane International, an investment advisory firm, said: “The RBI interest rate hike of 0.50% is in line with expectations. Interest rates are raised by central banks in developing and developed countries to control volatile inflation.

He said the RBI may raise rates further before halting interest rate hikes.

Details of the Reserve Bank’s Monetary Policy Committee meeting will be released on October 14, 2022. The next MPC meeting is scheduled for December 5-7 this year.

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