In the credit policy, the monetary policy committee plans to raise the repo rate by 50 basis points to 5.90 per cent and keep the stance unchanged, as per Morgan Stanley.

“We were earlier expecting a 35bp increase. However, in our view, the sticky inflation and continued hawkish stance of DM central banks warrants continued front loading of rate hikes,” media reported.

• NLC India To Start Mining In Machhakata Coal Block
• P N Gadgil Jewellers Ltd IPO GMP, Issue Date, Key Dates & Financials
• European Stocks Sink Ahead of U.S. Payrolls’ Report
• Coal Ministry Allocates Orders for 3 Commercial Mines, Rs 4,500 crore Investment Potential
• SEBI To Tighten F&O Rules Despite Investor Pushback: Report

The Reserve Bank of India (RBI) has ranged above the upper tolerance band for the eighth straight. Therefore, the inflation will remain around 7.1-7.4 per cent in September.

“After that, we expect the trend to moderate but remain above 6 per cent until January/February 2023. Risks to the inflation outlook are skewed to the upside due to uncertainty around food inflation trajectory (sowing for rice and pulses is lower YoY), changes in global commodity prices and the possibility of imported inflation if the exchange rate weakens amid dollar strength,” the media reported.

The RBI repo rate by 140 basis points with surplus liquidity has fallen significantly, now to $19.1 billion from $89 billion in January 2022, pushing the weighted average call rate to 5 per cent from 3.5 per cent in April. However, real rates have been less stark, with real policy rates at -1.6 per cent currently vs -3.8 per cent in April.