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    RBI likely to hike lending rate by 35-50 bps tomorrow, retain inflation and growth projections: CNBC-TV18 Poll

    economy | IST

    RBI likely to hike lending rate by 35-50 bps tomorrow, retain inflation and growth projections: CNBC-TV18 Poll

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    CNBC-TV18 polled eminent economists and market veterans to get a sense of what the street expects from Governor Shaktikanta Das and his team. Half the people polled believe that a 35 bps rate hike is most likely.

    The Monetary Policy Committee of the Reserve Bank of India is set to announce its rate decision on Friday and a repo rate (rate at which the RBI lends money to commercial banks) hike is a given. The question is how much?
    CNBC-TV18 polled eminent economists and market veterans to get a sense of what the street expects from Governor Shaktikanta Das and his team. Half the people polled believe that a 35 bps rate hike is most likely. Further, a majority believe that the repo rate will be at 5.75 percent by December this year and touch 6 percent by the time this rate hike cycle ends.
    One of the prime drivers of interest rates, not only in India but across the globe, has been rising inflation. The RBI Governor mentioned this in his last policy address and with prices not cooling off substantially, CNBC-TV18's poll does not foresee a change in the projected 6.7 percent for the current fiscal by the central bank. Similarly, the growth projection is also unlikely to change and will stay at 7.2 percent.
    When it comes to the central bank's stance in the August policy, a majority believe that it will be retained as a "withdrawal of accommodation" which was stated in the last policy. A few however believe it can be changed to "neutral".
    The RBI has been actively protecting the Indian currency in recent times and India’s forex reserves have shrunk in the past few months because of the higher cost of imports. The central bank announced a slew of measures to tackle this and economists don't foresee a new set of measures being announced tomorrow.
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