The Reserve Bank of India (RBI) may go for a final 25-bps increase in the current rate-hike cycle next week and a reduction would come in only by the end of third quarter of FY24, chief economist at Axis Bank Saugata Bhattacharya said on Wednesday.
“I am leaning towards a further and final 0.25 percentage point hike in rates,” Bhattacharya said at a press conference, adding that the hike will tame the stubbornly-high core inflation. He also said the slowdown in growth visible in anecdotal evidence at present, coupled with some cool down in inflation, should prompt the monetary policy committee to cut rates by the end of the third quarter of FY24.
The RBI has raised its benchmark repo rate cumulatively by 250 basis points to 6.50% since the beginning of the rate hike cycle in May 2022. In the February policy, two external members of the MPC — Jayant Verma and Ashima