RBI MPC: The US Federal Reserve raised interest rates by 75 basis points on Wednesday. The US Federal Reserve has raised interest rates for the third time in the past few years.
As such, it is inevitable that monetary policies in emerging markets will take cues from the US Fed.
RBI’s monetary policy committee will take guidance from higher inflation in India and inconsistent data points from global economies.
Compared to 2019, banking system liquidity in India is negative. India’s retail inflation for August stood at 7%.
As a result, RBI is expected to raise interest rates by 25 basis points. Meanwhile, in the last month, Indian markets (BSE Sensex) have seen over 59,000.
But this may not be possible for long. On the other hand the value of the Indian rupee continues to weaken.
Due to this, the Indian stock markets will remain volatile in the coming weeks as well. Picking the right stocks in these turbulent times can be problematic for retail investors.
Meanwhile, the Reserve Bank of India’s monetary policy meeting is scheduled for next week. Then, there is potential for a repo rate hike of 0.25-.050 bps.
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