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Quote on RBI Policy By Mr. Mitul Shah, Head of Research at Reliance Securities

50bps repo rate hike to 5.4% by the RBI makes the policy rate is the highest since Aug’19. On the positive note, maintaining the real GDP growth forecast of 7.2% for FY23 is liked by street. It seems to be more worried about external global factors this time, which has weakened INR recently. The 3rd consecutive rate hike by RBI since May’22 cumulatively 140 bps in its effort to contain inflation would certainly increase cost of borrowing and would impact few consumer sectors. We expect real estate sector to remain most affected, while financial sector would be benefitted with the likely NIM expansion with higher spread.

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