The Reserve Bank is likely to go for more rate🎃 hikes like the one on Wednesday on risks from factors like the minimum support prices for farm produce and🅘 firm global commodity prices, HDFC Bank said on Wednesday.
"This is not likely to be end of the hike cycle as domestic price riꦺsks such as MSP hikes and firm global commodity prices would warrant further monetary action," the bank said in a post on microblogging site Twitter.
It termed the unanimouꦆs rate hike by the six-member monetary policy committee (MPC) as "sensible and cautious" given the 𒊎events of the last two weeks.
T🦋he bank, however, said that the boost in liquidity through cha♌nges in liquidity coverage ratio will be offsetting the repo rate hike.
In the first such action in more than four years, the MPC resolved to hike the repo𓃲 rate by 0.25 pe��r cent to 6.25 per cent, citing risks to inflation, for which the RBI estimate was upped by up to 0.30 p🐎er cent during the fiscal.
Governor Urj🀅it Patel later explained that the growth momentum is also picking up in the economy and the MPC decided to focus on its core objective of inflation tౠargeting.
He said the RBI will be cautious way f꧒orward and will look at data on both inflation and growth.
The ra🏅te hike is set to come as a dampener to borrowers as banks have a🌼lready been raising rates in the past few weeks.
(PTI)
