Economists expect 25 bps rate hike in April 2023
With India’s retail inflation staying above the Reserve Bank of India (RBI)’s upper tolerance limit of six per cent for two straight months, most economists opine that monetary policy tightening would continue. Economists at IDFC Bank, HDFC Bank and Motilal Oswal expect the central bank to opt for a 25 basis point hike. However, economists at Nomura have lowered the probability of a hike to 20 per cent from 30 per cent earlier, while maintaining baseline view of a pause at the upcoming monetary policy committee (MPC) meeting in April 2023. According to them, headline inflation may moderate to around 5.5 per cent in March 2023, with core easing to around 5.7 per cent.