Punjab, Oct. 6 -- The RBI announces its policy decision at 10 am tomorrow. Most economists expect a 25 basis point hike, taking the repo rate from 5.25% to 5.50%. It would be the first increase since February 2023.
Why a hike is on the table
Retail inflation reached 4.82% in August, a 20-month high, against the RBI's 4% midpoint. Wholesale inflation ran at 9.92%. The rupee has been near 96 to the dollar.
And the external picture changed: the US Federal Reserve hiked on 17 September for the first time since 2023, with most of its policymakers expecting another. A widening rate differential pulls capital out and pushes the rupee down - foreign investors withdrew about Rs 21,000 crore from Indian equities in September.
Nomura and SBI Resea...