CEA V Anantha Nageswaran says India's growth to be in range of 7-8.5%

We are in a never-normal world and more rate hikes are coming: Uday Kotak

The CEA said he had a conversation this afternoon with Fitch Ratings which has projected a growth rate of 8.5 percent for India. Although they have a negative outlook on India with BBB minus rating, they do have a forecast of 8.5 percent real GDP growth for 2022-23, he added.

"So, the reality may in fact somewhere between this range of 7-8.5 percent. We will take that in the current circumstances because the uncertainty as to how long this current conflict in Europe with last and the impact it would have not only on the price of hydrocarbon fuel, but also on fertiliser prices, food prices, etc is quite difficult to guess at this point," he said.

There are spillover effects likely to come from the monetary policy tightening by central banks in the advanced countries as well, he added.

RBI on Wednesday after an unscheduled MPC meeting hiked the benchmark lending rate by 40 basis points (bps) to 4.40 percent to contain inflation that has remained stubbornly above the target of 6 percent for the last three months.

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The Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das also raised the amount of deposits banks are required to maintain a cash reserve by 50 bps to 4.5 percent to suck out Rs 87,000 crore of liquidity from the banking system.

This is the first-rate hike since August 2018 and the first instance of the MPC making an unscheduled increase in the repo rate.