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08-05-2022 12:36 PM | Source: Geojit Financial Services Ltd
Quote on MPC rate hike announcement from Dr. V K Vijayakumar, Geojit Financial
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Quote on MPC rate hike announcement from Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

"The 50 bp repo rate hike came 15 bp higher than the majority expectation of a 35bp hike. It is evident that the MPC is frontloading the rate hikes since it feels that " CPI inflation is above comfort levels. " The MPC has been emboldened to go for this 50 bp hike since "the economic activity is resilient" and " withdrawal of accommodation stance is necessary to anchor inflation expectations". The RBI governor went so far as to say that " the Indian economy is holding steady in an ocean of turbulence." The capacity utilization in industry at 75% is higher than the long-term average. This positive view on the economy has been well received by the stock market in spite of the higher at hand expected repo rate hike."

 

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