Fitch sees another 100 bps policy rate hike by Dec, cites rising inflation

Growth will improve in June quarter as consumption revives and Covid-19 cases continue falling, it says

The Reserve Bank of India (RBI) could increase policy rate by another 100 basis points to 5.9 per cent by December 2022, said Fitch Ratings on Tuesday.

“With the inflation rate on the rise, the Reserve Bank of India (RBI) turned hawkish in April by introducing the new Standing Deposit Facility (SDR), which replaced the reverse repo rate to set a new, higher floor for the interest rate corridor. In May, in an unscheduled policy announcement, the RBI raised rates by 40bp to 4.4%, and subsequently to 4.9% in June. Given the deteriorating outlook for inflation, we now expect the