RBI may hike 25-50 basis points at monetary policy meeting next week

The Reserve Bank of India's (RBI) rate-setting committee is likely to hike 25-50 basis points in repo rate in the monetary policy meeting to be held between August 3-5, according to the estimates of various fund managers and economists.

Economist and fund managers are of the mix view on the policy stance. Few are expecting stance will be change to 'Neutral', while some says 'Withdraw of accommodative stance could persist'.

"We expect 40-50 bps hike in repo rate in August policy review. Withdraw of accommodative stance could persist," said Vivek Kumar, Economist, QuantEco Research.

In last two policies, the central bank has hiked the rate by a cumulative of 90 basis points in May and June, due to high inflation, which was breaching RBI's upper tolerance band for the consecutive months.

"25-35 bps of repo rate hike. Stance may switch to neutral. Guidance may be somewhat more comforting than previous policy given some correction in commodity prices and range bound crude oil prices," said Mahendra Jajoo, CIO, Fixed Income at Mirae Asset Investment Managers.