‘RBI to hike repo rate despite global cenbank rethink’

Globally, investors scrambled to pull down rate expectations on Monday and abandoned bets on the Federal Reserve pushing through bigger hikes, reckoning the biggest American bank failure since the 2008 crisis will make policymakers think twice.

RBI’s monetary policy committee is likely to deliver the expected rate hike of 25 basis points (bps) during its meeting on April 3-6, even as global markets lowered rate hike bets from the US next week following the banking crisis, economists said on Tuesday.

India’s headline and core inflation has been unrelenting, with data post market close on Monday showing annual retail inflation remained above the Reserve Bank of India’s (RBI) upper limit, easing only slightly from January’s 6.52pc.

Globally, investors scrambled to pull down rate expectations on Monday and abandoned bets on the Federal Reserve pushing through bigger hikes, reckoning the biggest American bank failure since the 2008 crisis will make policymakers think twice.

“Overall, the worst period of high inflation is likely behind us. We expect March inflation to come around 6pc and to retreat toward 5pc in the coming months,” Motilal Oswal analysts said, adding the 25bps hike in April was a “given”.

“The RBI will continue to remain non-committal on the future rates path, as the fluid global situation demands frequent macro re-assessments,” Madhavi Arora and Harshal Patel, economists at Emkay Global wrote in a note.

Also Read: UP Cong to protest against 'rising' inflation, unemployment in state on Monday

Wholesale inflation eases

The wholesale price-based inflation declined to over two-year low of 3.85 per cent in January on easing prices of manufactured items, fuel and power, even though food articles remained expensive. The WPI inflation was 4.73 per cent in January and 13.43 per cent in February, last year. It was 2.51 per cent in January 2021.

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