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

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.