UBS sees RBI delivering 25-30 bps rate hike this week, pausing after Oct
The Reserve Bank will deliver two more rate increases with the first of 25-30 bps later this week, and then pause for data-prints on domestic inflation and the US economy, says a foreign brokerage.
The US economy is widely feared to be headed towards a recession this year having already contracted by 0.9 per cent in the June quarter and 1.6 per cent in the previous. If an economy contracts for three consecutive quarters, then it is considered that economy is in recession.
On the domestic front, the consensus view is that the economy will continue to face headwinds from multiple fronts -- rising current account deficit (CAD), falling balance of payments, high inflation and rupee depreciation which has already plumbed the 80 mark against the greenback.
The RBI's rate-setting panel MPC will announce the second bimonthly policy review on Friday and the market has already priced-in a third rate hike given the run-away inflation, which is has already been hovering over 7 per cent for the