The Reserve Bank of India raised the policy repo rate 25bps to 5.50% on
Wednesday, its first hike in nearly four years. Larsen & Toubro Group chief
economist Sachchidanand Shukla said the 25bps move was largely priced in but the
shift in stance signals the central bank has effectively committed to further
DBS Group senior economist Radhika Rao hikes even if food or oil prices reverse.
said the October hike indicates cyclical inflation risks are no longer benign
and underscores the MPC’s hawkish intent; with elevated oil prices, tighter
global financial conditions and weather-related food risks, policymakers acted
to reinforce inflation-fighting credibility before risks become entrenched.
