What do you foresee the RBI announcing in its 08th June monetary policy?

As per the street estimates, the MPC is likely to hike the repo rates by 35-50 bps rate in its June policy statement. The range pegs a conservative rate hike target of 35 bps and a more aggressive rate target of 50 bps based on the inflation and growth projections. However, the RBI may choose to pre-empt the next round of rate hikes by the Fed in June by taking on a more aggressive stance on the rates front. We need to await further cues from the RBI.

While the CRR hike is also expected of around 50 bps, the view on CRR hike is more divided. Since a lot of liquidity has been soaked, the CRR may be held back for the time being. The 3-day MPC meet will culminate with presentation of monetary policy on Wednesday 08th June. In the month of April 2022, retail inflation had touched a level of 7.79%., while WPI inflation was at 15.08%. RBI governor has indicated that a reversal to pre-COVID repo rate of 5.15% would be the target. MPC may even raise the inflation forecast for FY23.