Expect 50 bps rate hike by RBI at its September 30 meeting: Citizen’s Monetary Policy Committee

India’s Monetary Policy Committee (MPC) will be meeting on September 30 after an unexpectedly hawkish guidance from the US Federal Reserve.

Global markets suffered sharp losses on Monday as worries over monetary policy tightening and the pace of the growth of the world economy weighed down investor sentiment.

The rupee has also slumped two percent (nearly Rs 2) in four sessions. It depreciated by as much as 63 paise to end at a record closing low of 81.62 versus the dollar on Monday after hitting a record low of 81.54 earlier in the session, as the greenback hit a fresh two-decade high against six other peers.

Meanwhile CNBC-TV18’s Citizen’s Monetary Policy Committee, which comprises Samiran Chakraborty, Chief India Economist at Citi; Soumya Kanti Ghosh, Group Chief Economic Advisor at State Bank of India; Sonal Varma, MD & Chief Economist at Nomura India; Pronab Sen, Former Chief Statistician; and Sajjid Chinoy, Chief India Economist at JPMorgan, believes that the RBI will hike rates by 50 basis points in its September 30 meeting.

However there were mixed opinions when it came to the stance, with Chakraborty and Varma batting for RBI to move back from accommodative to neutral stance, while Ghosh and Chinoy were in favour of a continuation of the accommodative stance. Sen opined that RBI might not take any clear position.