Interest rates may increase again in the next meeting of RBI, MPC

RBI MPC Met Analysts believe that the RBI may increase the interest rate by 50 basis points or up to 0.50 percent in the MPC meeting to be held at the end of September. The repo rate can touch the figure of 6 percent.

Interest rates may increase again in the next meeting of RBI, MPC
RBI may increase the internet rate, image source: DNA

After the rise in retail inflation in August, analysts have started anticipating an interest rate hike by the RBI. In the latest estimates, analysts believe that the central bank may increase the interest rate by 50 basis points, or 0.50 percent, in the MPC meeting to be held later this September.

The biggest reason behind increasing interest rates is going to be the rising inflation in the countryAccording to the August retail inflation data released by the government, inflation in the country has increased from 6.7 percent in July to 7 percent in August and it is in the inflation band 2-6 fixed by the RBI. One percent more than one percent. The biggest reason behind the rise in inflation in August was the rise in the prices of food items.

Analysts view on interest rate hike

Tanvi Gupta Jain, Chief Economist, India, Swiss brokerage UBS Securities, says that looking at the impact of the base year, it seems that inflation may remain around August levels in September as well. However, there may be some relief from this in October. RBI may increase the interest rate by 35 basis points or 0.35 per cent in the MPC meeting to be held till September 30.

Rahul Bajoria, Chief Economist, Barclays Securities India, says retail and wholesale inflation will continue to rise. RBI may hike interest rates by 50 basis points or 0.50 per cent after the MPC meeting to be held later this month to address the increased inflation.

US financial institution Morgan Stanley said in its report that the RBI may increase the interest rate by 35 basis points or 0.35 percent in the MPC meeting to be held on September 30. Due to this, the inflation rate may come down to 5.3 percent in the financial year 2023-24.