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Below is quote on RBI Monetary Policy by Sujan Hajra - Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers

The 50 bps rate hike by the Reserve Bank of India today is broadly in line with the consensus expectations. Recent strong growth performance in India, the prevailing positive growth outlook and the perception that all central banks including the RBI is behind the inflation curve seem to have pushed the RBI to continue with faster normalization of the policy rate. The current elevated level of inflation and the likelihood of inflation for the next three months being higher than the current level also likely to have influenced RBI's decision to go for a 50 with rate hike this time. We expect the inflation to remain elevated for the next three months and come down gradually thereafter. We do not expect retail inflation to come within RBI's comfort zone of 2-6% before the closing months of the current financial year. This is likely to nudge the RBI to  maintain the current tightening stance. At the same time, given the current subdued global growth outlook, the RBI is likely to slow down the policy rate normalization from this point onwards. Our assessment suggests that the market is currently factoring in the peak repo rate at 6% in this cycle and the medium term inflation in the range of 5 to 5.2%. We have similar view on the rate front but we feel that the softening of inflation in the early part of the next financial year can be substantially more than what is being currently factored in. The measures are neutral for debt and equity markets but positive for rupee.

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