The Reserve Bank today turned even more hawkish with an unscheduled, unconventional 40bp hike that takes the repo rate to 4.40%. We had been among the early hawks on Indian monetary policy and were already expecting more rate hikes than the consensus this year, but the repo rate now looks set to rise beyond the 5.00% we had pencilled in for end-2022. We now think it will rise to 5.65% this year.
EM Drop-In (5th May, 10:00 EDT/15:00 BST): In light of the RBI’s intermeeting rate hike, we’re adding India’s monetary policy outlook to the schedule for our monthly EM briefing. Join us on Thursday, when we’ll also be talking Russian gas, FX weakness and surging food prices. Register now
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