Quote on RBI rate hike by 25 bps by Nikunj Saraf, CEO, Choice Wealth
Below the Quote on RBI rate hike by 25 bps by Nikunj Saraf, CEO, Choice Wealth
A 25 bps RBI rate hike is possible, but not a certainty. The key trigger would be persistent inflation, particularly if elevated crude prices start feeding into domestic inflation and put pressure on the rupee. The RBI would also be mindful of the impact of higher rates on growth.
If a hike happens, equities could see some near-term pressure, especially rate-sensitive sectors, while bond yields may move higher. However, if the hike is already priced in, the bigger market reaction will come from the RBI’s guidance on what happens next.
For US Treasury yields and the USD, the RBI decision will have limited direct impact. These will be driven more by US inflation, Fed expectations and global crude prices.
For Bitcoin, higher global yields and tighter liquidity are generally negative for risk assets. But the RBI’s 25 bps move itself is unlikely to be a major driver; global liquidity and the US Fed will matter much more.
Overall, the rate decision is important, but the RBI’s commentary and inflation outlook will be more important than the 25 bps move itself.
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