RBI May Hike Repo Rate By Another 50 Bps By February 2027 Amid Inflation Risks: Emkay

RBI May Hike Repo Rate By Another 50 Bps By February 2027 Amid Inflation Risks: Emkay (AI-generated Image)

Emkay Global Financial Services expects the Reserve Bank of India to raise interest rates by another 50 basis points by February 2027, citing rising inflationary pressures and tighter global financial conditions. In its analysis of the minutes of the RBI's October Monetary Policy Committee meeting, Emkay forecasts a 25 basis point rate hike each in December 2026 and February 2027. This would take the total rate hike in the current cycle to 75 basis points.

The report stated that the MPC minutes supported further gradual rate hikes but indicated that a significant extension of the tightening cycle remained unlikely without stronger evidence of persistent inflation. Emkay's report identified the spread of inflation across goods and services as a key concern. The share of items in the Consumer Price Index basket recording inflation above 4 percent rose from 20 percent in March 2026 to 37 percent in August and 46 percent in September, according to the report.

However, the report mentioned there was limited evidence that these pressures had become firmly embedded in companies' pricing decisions. Some MPC members also maintained that inflation…

Original source: https://www.timesnownews.com/business-economy