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Below the Quote on MPC announcement by Rajeev Sharan, Head of Research, Brickwork Ratings

"The RBI has made a clear hawkish turn, raising the repo rate by 25 basis points to 5.50% and shifting its stance to calibrated tightening. This is its first hike since the easing cycle ended, and the decision is in line with our expectations. The message is that inflation is no longer as benign as last year, with price pressures now spreading beyond food and fuel into core, and the central bank wants to keep expectations in check even as growth stays strong. The RBI has raised its FY27 growth projection to 7.1%, following a robust 7.8% first quarter. Our own reading is marginally more measured, with FY27 growth at 7%, and the remaining quarters at 7% in Q2, 6.8% in Q3 and 6.7% in Q4. On prices, CPI inflation has been revised up to 5.2%, peaking near 6% in the third quarter. For rate-sensitive sectors such as housing, autos and NBFCs, borrowing costs will edge higher, though resilient demand should cushion the blow. Bond yields are likely to reprice upward, while a firmer rate differential should lend the rupee some support against a strong dollar and help steady portfolio flows."

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