HSBC sees slower rate hikes by RBI towards year-end on growth worries

HSBC is expecting the RBI to take repo rate to 6% by the middle of the next year, from 4.9% now

India’s central bank may slow down the pace of its monetary tightening by the end of the year as economic growth will lose momentum with waning demand, according to HSBC Holdings Plc.

“RBI will not be that aggressive toward the end of the year because growth will begin to slow then and it is very conscious about the sacrifice ratio,” HSBC’s Chief India Economist Pranjul Bhandari said in an interview to Rishaad Salamat and Haslinda Amin on Bloomberg TV Monday. “When you hike rates too much then it starts hurting growth.”

India’s central bank has cumulatively raised rate by 90 basis points