RBI To Hike Rate By 35 Bps In Upcoming MPC Meet: Bofa Securities

In its next RBI MPC, Bofa Securities is of the view that RBI shall go for 35 basis point rate hike. 1 bps is one-hundredth of a percentage point. Also as per the American brokerage, there is anticipated a change in monetary policy stance to 'calibrated tightening'.

RBI To Hike Rate By 35 Bps In Upcoming MPC Meet: Bofa Securities

RBI on the back of some operational exigencies rescheduled its MPC meet and now the outcome shall be delivered on August 5, 2022.

Bofa Securities in its report stated, "In our base case, we now see the RBI MPC hike policy repo rate by 0.35 per cent, taking it to 5.25 per cent (higher than pre-pandemic level), with stance change to calibrated tightening from withdrawal of accommodation."

Also, at the same time the brokerage is foreseeing the apex bank to retain its CPI and GDP forecasts at 6.7% and 7.2%, respectively.

In the July 2022, RBI bulletin, the apex banker iterated that inflation could ease sooner and faster and the key look-out shall be the direction of change in inflation and not its level-in such extraordinary times.

At a conclave convened by BoB, the RBI governor said any decision of RBI pertaining to its liquidity as well as policy rate takes into account the kind of impact it shall have on growth as well as revival of economic activity.

Nevertheless, looking at priorities, RBI's first watch out is inflation followed by growth.

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