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Below is perspective on RBI MPC Policy by Mr. Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services Ltd.

RBI hikes policy rates by 35bps

Expect at least one more rate hike of 25bp in CY23

-- In an expected move, policy interest rates are raised by 35bps today, taking repo rate to 6.25% and SDF to 6%. Further, the Governor made it clear that the fight against inflation will continue, while India's growth remains more resilient. It is, thus, clear that there will be at least one more rate hike of 25bp in CY23.

-- The RBI reduced its GDP growth forecasts to 6.8% for FY23 (from 7%) and to 7.1% for 1QFY24 (from 7.2%) and put at 5.9% in 2QFY24.

-- At the same time, inflation is projected to remain >4% for the next 12 months. It is kept unchanged at 6.7%/5% for FY23/1QFY24 and put at 5.4% in 2QFY24.

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