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Below is Expectation quote on RBI Monetary Policy By Rahul Chander, MD & CEO of LivFin

“Since inflation continues to slowly ease off across the world, interest rate hikes have also started to ease off. We are now hopefully in the last possible 75-100 bps hike of the cycle. The MPC will have to keep in mind the impact of ratae increases on GDP growth, the expectation for which for FY2023 has moderated sharply. While part of this could be attributed to unforeseen events like the Russia- Ukraine conflict which has played havoc with the commodity markets, the previous rate hikes have also partially contributed to the falling GDP growth. The INR exchange rate vis-à-vis the USD especially has also been a matter of concern, though the trend seems to have been reversed over the last few weeks. However, with the MPC meeting in December coming a few weeks before the next US Fed meeting, the MPC will have its task cut out, as a significant increase in US Fed rate will have its bearing on the exchange rate. Hence a delicate balance is now needed in determining additional rate increases. The US Fed eased off the interest rate hike from about 75 bps to 50 bps and has indicated a further reduction. Similarly, the Reserve Bank of India is also expected to ease it off from a 50 bps hike to 25-35 basis points (possibly towards the lower end of that band)”

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