Analysts expect another rate hike on October 25
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The Reserve Bank which today went in for 12th hike in policy rates over the last 18 months may not take a pause and there is every likelihood of the central bank going for another rate hike in the October 25 policy, economists and analysts said today.
HDFC Bank Chief Economist Abheek Barua said going by the tone of the policy statement today, it appears that there will be another hike of 25 bps in the October policy.
Rating major Crisil also concurred saying while 'we might be heading towards the end of the rate hike cycle, today's hike may not be the last one'.
HSBC Chief Economist for India and Asean Region Leif Eskesen too opined that while the 25 bps hike was expected, RBI's statement remains hawkish and hence he expects 'at least another 25 bps, possibly as soon as Q4 this calendar year'.
StanChart Chief Economist Samiran Chakraborty opined that going by the hawkish stance, another 25 bps increase in the repo rate in October is likely.
Citi India Economist Rohini Malkani said RBI's concerns on inflation do keep the window open for further rate actions in the next policy review.
Nomura, in a note said that today's hike was expected given the high inflation but has welcomed the less hawkish stance of the monetary authority.
"We maintain our view that this is the last rate hike action in the current policy cycle, as we believe that inflationary pressures will weaken further in the coming quarters," Nomura said, adding the guidance suggests that RBI has shifted from a strong anti-inflationary bias to a more wait and see mode, with a close eye on the inflation trajectory and global developments.
"However, we think the RBI has kept its options open and may consider another hike if inflationary pressures do not come down as expected," it said.'
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