Expert views on RBI rate hike

Thankfully tightening to its own tune

Leif Eskesen, Chief Economist for India & ASEAN HSBC Global Research, Singapore

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Time for a breather?

Sonal Varma, India Economist, Nomura Financial Advisory and Securities (India) Pvt. Ltd

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The ‘unfinished’ task of taming inflation

Saugata Bhattacharya, senior vice-president (business and economic research) at Axis Bank

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RBI’s action: a suboptimal policy mix

A.Prasanna, vice-president, ICICI Securities Primary Dealership Ltd

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Banker’s Trust | Three surprises and one lesson

Tamal Bandyopadhyay, deputy managing editor, Mint

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Mark to Market | Manas Chakravarty

The reasons for the 50 bps hike

Manas Chakravarty senior editor, Mint

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Ourview | RBI’s tough message

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RBI shocks with 50 bps rate hike

Corporate and individual loans will become more expensive after the Reserve Bank of India (RBI) on Tuesday surprised the market with a half percentage point hike in its policy rate to reign in high inflation, even as it highlighted the government’s own inadequacy to tackle what has been, for well over a year now, the country’s most pressing macroeconomic problem.

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Interview | This is a decisive change in stance, says Gokarn

Subir Gokarn, deputy governor, RBI

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Run-up to monetary policy

Are we getting close to end of rate hike cycle?

Banker’s Trust | Tamal Bandyopadhyay

Commercial banks as well as Indian corporations do not want the country’s central bank to go for yet another rate hike, the 11th since March 2010, when it unveils the quarterly review of monetary policy on Tuesday, but the Reserve Bank of India (RBI) is unlikely to oblige them. My guess is RBI governor D. Subbarao will once again take his now-famous baby step and hike the policy rate by 25 basis points (bps) to 7.75%, raising it by 450 bps in the current rate tightening cycle.

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Tamal Bandyopadhyay is a deputy managing editor of Mint.

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One more rate increase likely

Samiran Chakraborty

The backdrop to the Reserve Bank of India (RBI) monetary policy meeting next week is not very different from what it has been in the recent past. Inflation is clearly at an unacceptable level and growth is moderating, but not collapsing. So, it is quite likely that the policy response from RBI will be a 25 basis points rate increase to reiterate its anti-inflationary stance. However, there is considerable uncertainty over the policy trajectory going forward and hence the policy statement will be scrutinized closely for RBI’s assessment of the current economic situation and any forward looking cues.

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Samiran Chakraborty is Asia economist, Standard Chartered Bank.

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Carry on hiking the policy rate

Richard Iley

Pause in response to building downside risks to global and domestic growth? Or press on with its long-established campaign of lifting policy rates to combat inflation? That, in a nutshell, is the policy choice facing the Reserve Bank of India (RBI) at its latest policy review meeting next week.

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Richard Iley is chief economist for Asia Pacific excluding Japan at BNP Paribas SA.

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• No time to slacken policy rate

Ajit Ranade

Imagine the following scenario: The central bank has been trying valiantly to control inflation. It is using every trick in its books to tame the monster. Apart from frequent interest rate hikes, it makes hawkish sounds, curtails credit, and also urges the central government to cut wasteful spending, and rein in the fiscal deficit.

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Ajit Ranade is chief economist, Aditya Birla Group.

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• Inflation control: chasing a chimera

Siddhartha Roy

We have had 10 rate hikes in past 15 months, yet inflation continues to be stubbornly persistent. Will a 25 or even a 50 basis points hike help in containing it? One basis point is one-hundredth of a percentage point.

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Siddhartha Roy is economic adviser, Tata group.

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• Taming inflation needs audacity

Jahangir Aziz

The economy is slowing on many fronts. Industrial production, car sales, Purchasing Managers’ Index—all point to activity moderating. On cue, there has been a lot of hand wringing over this. But a slowing economy is not necessarily a bad thing. Indeed, the real risk is the economy will not slow sufficiently to bring down the raging inflation.

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Jahangir Aziz is senior Asia economist, JPMorgan Chase.

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