Business · India Bureau
RBI may raise rates further by 50-75 bps, warns Kotak
HDFC Bank chairman Uday Kotak expects the Reserve Bank of India to implement additional repo rate increases of 50-75 basis points, even as geopolitical tensions pose extended risks to the economic outlook.
LSN India ·
The Reserve Bank of India is likely to continue its monetary tightening cycle with further rate hikes totalling between 50 and 75 basis points, according to Uday Kotak, chairman of HDFC Bank. Speaking on the central bank's policy stance, Kotak indicated that additional measures may be warranted to address inflationary pressures, though the trajectory and magnitude of future increases remain subject to evolving economic conditions.
Kotak also flagged persistent risks emanating from Middle East tensions, cautioning that geopolitical complications could have prolonged implications for global and domestic economic stability. The escalating regional situation warrants close monitoring given potential spillover effects on commodity prices and supply chains, he noted.
Despite these headwinds, Kotak expressed confidence in India's equity markets, projecting that domestic stocks remain well-positioned to attract sustained foreign investor interest. The country's fundamentals and growth prospects continue to offer compelling investment opportunities amid global uncertainty, he indicated, suggesting that Indian assets may serve as a relative safe haven for international capital flows seeking exposure to emerging market growth.
The comments come as the RBI navigates the delicate balance between controlling inflation and supporting economic growth amid volatile external conditions and domestic demand dynamics.