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Below is Comment on RBI hikes repo rate By Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities, Kotak Institutional Equities

“The combination of 40 bps hike in repo rate and 50 bps hike in CRR is an attempt by the RBI to preempt the rising inflationary pressures and be ahead of the curve. The bigger surprise was the CRR hike which indicates the RBI’s intent on withdrawing liquidity at a sharper pace. While inflation is unlikely to decline in the near term, today’s move should help in pushing real rates towards neutral over the next few quarters. Rates across the curve will reprice factoring in a markedly more hawkish RBI. We continue to expect cumulative 100-125 bps of repo rate hikes in FY2023.”

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