RBI Surprise Rate Raise: Top Comments from Economists

Economists felt that more such behavior could be seen by the central bank in the future as the Reserve Bank of India (RBI) surprised the market by raising its repo rate by 40 basis points to 4.40% on Wednesday. rice field.

There was also the view that demand had disappeared to curb inflation.

Here are some observations by economists on the RBI rate hike move:

Madansa Navis, Chief Economist, Bank of Baroda

“The RBI has surprised the market with two approaches: accommodation withdrawal: a repo rate of 40 bps and a reserve requirement ratio (CRR) of 50 bps. This shows that this situation will increase even further. Increasingly, we will take action over time as inflation changes. We expected the repo rate to rise by 50 bps in 2022, but we expect it to rise by another 50 bps this year. These two measures affect both the amount of surplus. The liquidity of the system and the cost of funding. “