- RBI raised repo rate by 25 basis points to 5.50 percent on Wednesday
- SBI economists expect a 50 basis points rate hike in December
- Inflation trajectory suggests a need for steeper rate hikes soon
The RBI will hike the key repo rate by a steeper 0.50 per cent at the next monetary policy review in December, economists at the country's largest lender SBI said on Wednesday.
The Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.50 per cent on Wednesday, its first hike in nearly four years.
The 0.25 per cent hike along with a shift in the stance to "calibrated tightening" is a decisive policy message, they said.
"Given the steepening inflation trajectory currently underway, we believe that the December policy cycle could mostly deliver a jumbo 50 bps rate hike depending on the global conditions," they said in a note.
SBI said that global conditions are likely to turn more volatile soon, and getting the repo rate to 6 per cent from the present 5.50 per cent will be the best option.
Even before the policy review, many economists and watchers had been expecting two rate hikes of 0.25 per cent each on Wednesday and at the December review.
The report also pitched for the country to have a clear artificial intelligence policy to facilitate capital flows to help the rupee.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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