• ABOUT US
  • CONTACT
  • TEAM
  • TERMS & CONDITIONS
  • GUEST POSTS
Sunday, October 26, 2025
  • Login
Economy India
No Result
View All Result
  • Home
  • Economy
  • Business
  • Companies
  • Finance
  • People
  • More
    • Insurance
    • Interview
    • Featured
    • Health
    • Technology
    • Entrepreneurship
    • Opinion
    • CSR
    • Stories
  • Home
  • Economy
  • Business
  • Companies
  • Finance
  • People
  • More
    • Insurance
    • Interview
    • Featured
    • Health
    • Technology
    • Entrepreneurship
    • Opinion
    • CSR
    • Stories
No Result
View All Result
Economy India
No Result
View All Result
Home Finance

RBI to Raise Rates Again in June but Not Clear by How Much: Poll

by Economy India
May 16, 2022
Reading Time: 3 mins read
FEATURED IMAGE ECONOMY INDIA 1 1
SHARESHARESHARESHARE

BENGALURU: The Reserve Bank of India will follow its surprise May rate rise with another hike at its meeting next month, according to a majority of analysts polled by Reuters who were exceptionally split on the size of the move.

India’s retail inflation accelerated to an eight-year high in April, remaining above the central bank’s tolerance limit for a fourth month in a row, and is likely to stay elevated.

ADVERTISEMENT

The sudden change in views on surging inflation and how to tame it means the RBI will likely take the repo rate, currently at 4.40%, back to at least its pre-pandemic level next quarter and not in 2023 as previously thought.

In the latest Reuters poll, over a quarter of economists, 14 of 53, expected the RBI to hike by 35 basis points to 4.75% next month, while 20 expected a larger move ranging from 40-75 basis points, including ten who forecast a 50 basis point hike.

Twelve respondents forecast a modest rate rise (10 to 25 basis points) while seven saw no move at the June 6-8 meeting.

At the meeting, the RBI is likely to also raise its inflation projection for the current fiscal year and will consider more interest rates, a source aware of the developments told Reuters.

However, such an exceptional splintering of views on how the RBI will follow up on its unscheduled 40 basis point move on May 4 shows the challenge facing forecasters who were completely taken off guard and not given clear guidance on what comes next.

“We need to really see the second action…in June to really get a grip of exactly what is the scale of policy normalisation that we can expect and the pace as well,” said Upasna Bhardwaj, senior economist at Kotak Mahindra Bank, who is predicting a 35 basis point rise to 4.75%, the median forecast for June.

But she added that “markets are clear on one account, that there is going to be aggressive policy rate hikes because inflation is the biggest threat at this point in time.”

That aggressive outlook in part reflects what other central banks were forecast to do, especially the U.S. Federal Reserve, which was expected to hike rates by 50 basis points at its upcoming meetings after a similar move earlier this month.

Nearly one-third of respondents, 17 of 53, forecast the repo rate at 5.15% next quarter, back to where it was before the pandemic. Another 20 predicted rates to go even higher.

More interest rate rises were on the way, with rates reaching 5.40% or higher by end-2022.

Respondents from a much smaller sample who had forecasts going to the end of next year, 11 of 15, saw the repo rate hitting 5.75% or higher.

Further, the chances of the RBI joining some of its peers in hiking 50 basis points appears stronger now than before.

Just over half of respondents to an additional question, 22 of 41, saw a high or very high chance of a 50 basis point RBI rate hike at the next meeting, while the rest saw a low or very low chance. That was an abrupt change from a survey taken last month, where the majority saw those chances as low.

“​Communications out of the RBI could have been a lot better…this kind of surprise move certainly does not help with policy credibility,” said Tuuli McCully, head of Asia-Pacific economics at Scotiabank.

“I see their reasoning why they felt like they couldn’t wait any longer and had to act, but it certainly is an issue… if they say something and then act the other way then, it doesn’t help with the communication.”

Still, when asked what the RBI’s surprise repo rate hike did for its credibility, more than two-thirds of respondents, 24 of 34, said improved while the rest said worsened or did nothing.

CSR Leadership Summit
ADVERTISEMENT
India CSR Awards
ADVERTISEMENT
ESG Professional Network
ADVERTISEMENT
Tags: Reserve Bank of India (RBI)
Economy India

Economy India

Economy India is one of the largest media on the Indian economy. It provides updates on economy, business and corporates and allied affairs of the Indian economy. It features news, views, interviews, articles on various subject matters related to the economy and business world.

Related Posts

Pakistan’s Total Public Debt Crosses $286 Billion in FY2024-25, Rising 13% Year-on-Year
Economy

Pakistan’s Total Public Debt Crosses $286 Billion in FY2024-25, Rising 13% Year-on-Year

October 25, 2025
RBI Appoints Sonali Sen Gupta as New Executive Director
Finance

RBI Appoints Sonali Sen Gupta as New Executive Director

October 23, 2025
Trump’s 100% Tariff on China Triggers $1.5 Trillion Market Meltdown
Economy

Trump’s 100% Tariff on China Triggers $1.5 Trillion Market Meltdown

October 13, 2025
India’s Trade Deficit Expected to Reach ₹2.5 Lakh Crore in September 2025
Economy

India’s Trade Deficit Expected to Reach ₹2.5 Lakh Crore in September 2025

October 13, 2025
India Extends Export Duty and Tax Refund Scheme (RoDTEP) Until March 2026: A Comprehensive Analysis
Economy

India Extends Export Duty and Tax Refund Scheme (RoDTEP) Until March 2026: A Comprehensive Analysis

September 30, 2025
Trump Slaps 100% Tariff on Branded Drugs from October 1; India, Key Exporter, Faces Uncertainty
Economy

Trump Slaps 100% Tariff on Branded Drugs from October 1; India, Key Exporter, Faces Uncertainty

September 26, 2025
Next Post
FEATURED IMAGE ECONOMY INDIA 1 1

SBI hikes lending rate by 0.1%, EMIs to go up

16th CSR Leadership Summit 2025
ADVERTISEMENT
India CSR Awards
ADVERTISEMENT

LATEST NEWS

UP CM Yogi Adityanath Meets PM Modi in New Delhi, Discusses State’s Development Agenda

Odisha Approves ₹1.46 Lakh Crore Investment Across 33 Projects, Including Adani’s Coal-to-Chemical Venture

Pakistan’s Total Public Debt Crosses $286 Billion in FY2024-25, Rising 13% Year-on-Year

Gold Prices Plunge ₹1,836 in a Day, Silver Falls ₹4,417: 7-Day Decline Wipes Out ₹9,356 from Gold’s Value

LIC Faces Political Storm Over ₹33,000 Crore Investment in Adani Group After US Media Report

HUDCO Signs ₹5,000 Crore MoU with JNPA to Boost Port Infrastructure Development

Aditya Birla Sun Life AMC Posts ₹241 Crore Net Profit in Q2; Margins Remain Stable

Ola CEO Bhavish Aggarwal Booked for Abetment of Suicide: Engineer’s Death Sparks Major Controversy

  • ABOUT US
  • CONTACT
  • TEAM
  • TERMS & CONDITIONS
  • GUEST POSTS

Copyright © 2024 - Economy India | All Rights Reserved

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Economy
  • Business
  • Companies
  • Finance
  • People
  • More
    • Insurance
    • Interview
    • Featured
    • Health
    • Technology
    • Entrepreneurship
    • Opinion
    • CSR
    • Stories

Copyright © 2024 - Economy India | All Rights Reserved