Overall monetary and credit conditions stay conducive for a durable economic recovery to take root. "With evidence that the economic recovery is well entrenched, policy normalization could be underway." "The RBI is currently in stage 2 (liquidity tightening) of the four-stage monetary policy normalization process that began with ‘less dovish’ comments from MPC members and will end with repo rate hikes" said Goldman Sachs in a report co-authored by Sanatanu Sengupta and Suraj Kumar." In our view, the RBI will likely move to stage 3 (reverse repo hike) by the end of this year, and start hiking repo rates from Q2 2022. We expect a cumulative 75bp of repo rate hikes in 2022."

Source: Economic Times November 24, 2021 06:26 UTC