Anand Rathi Financial Services is expecting another rate hike by the Reserve Bank of India (RBI) during the policy review next month. It also expects the central bank to announce further rate hikes during the next 12 months as it gets into monetary tightening mode.
"We continue to expect another 25 bps rate hike during the Apr ’10 policy. Thereafter, we expect up to 50 bps more rate hike during the next 12 months," said the domestic brokerage in a report on Monday (March 22). "The hike’s size, though, indicates future tightening would be nuanced rather than abrupt," it adds.
According to the report, the rate hike is a clear signal that the Indian economy is "firmly on the path of monetary tightening". "The rebound in economic activity and hardening inflation are the reasons mentioned by the RBI for the inter-policy rate hikes," explains the report.
Meanwhile, the brokerage expects the benchmark Nifty "to find intermediate support at 5150-5200 band". Around 11.30am, the 50-share Nifty was trading at 5,248.05, down 14.75 points.
