UBS expects RBI to hike policy repo rate by 25-30 bps in August 2022
UBS Securities chief India economist Tanvee Jain-Gupta expects the Reserve Bank of India (RBI) to hike the policy repo rate 25-30 basis point (bps) in the August policy review and another one in October 2022. However, she added that the quantum of that increase will depend on the dataprints on the domestic inflation and the shape of the US economy, which is more likely to enter a recession. After the October review, Gupta feels the central bank is more likely to pause as inflation is likely to ease down from thereon. UBS expects prices to begin to cool off from the second half of the year and to ease further to six per cent by March 2023. On the widening current account deficit, Gupta stated that it will remain high at 2.9 per cent for the current fiscal.