Reserve Bank of India raises the key policy interest rate by 35 bps.

The Reserve Bank of India hiked its benchmark repo rate up by 35 basis points (bps) on Wednesday. As it was largely anticipated

Additionally raised by the same amount to 6.00% & 6.50%, respectively, were the rates for the standing deposit facility and thus the marginal standing facility.

Economist Response to Rising Inflation & Rising Interest Rates

“The fight against inflation is not yet over,’ (RBI Governor (Shaktikanta) Das has continued to talk hawkish.” Asserted AURODEEP NANDI, INDIA ECONOMIST & VICE PRESIDENT, NOMURA, MUMBAI.

Economist DIPANWITA MAZUMDAR of the Bank of Baroda in Mumbai says “Demand pressure is anticipate to persist in the future.

Explanation: Why did the Monetary Committee hike the Interest rate?

Price inflation in cereals, milk, pulses, and spices is still present in November of 22 as well, thus there is a real concern to the headline CPI print.“

“The announcement was somewhat more hawkish than even expected by markets. With no hint that the central bank is close to the end of its rate-hike cycle for the time being.”