RBI hikes repo rate - Views of Acuite Ratings

Mr. Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research

"In a unscheduled but not entirely unexpected announcement, the MPC of RBI has announced a hike in repo rate and in all other benchmark rates by 40 bps. Further, the CRR has also been increased by 50 bps to indicate a reversal of the easy liquidity scenario. Virtually, RBI has exited from the accommodative policy stance through these measures although its actions may continue to be calibrated. Acuité has been highlighting for some time now that a rate hike is imminent given the exceptionally strong inflationary pressures across the globe and also in India partly triggered by the Ukraine crisis. The headline CPI inflation has already moved up to 6.95% in Mar-22 and we expect a further rise in the print over the next 2-3 months which will reflect the impact of retail fuel prices and also the increase in food inflation from categories such as edible oil."

Source : Equity Bulls

Keywords

RBI RateHike AcuiteRatings