The poll also suggests that the central bank is likely to maintain a cautious approach after the hike, with most respondents expecting the MPC to retain its neutral stance while signalling that future actions will remain dependent on incoming data. Markets will also closely watch Governor Sanjay Malhotra’s commentary for clues on the pace of further tightening.
The case for a rate hike has strengthened over the past month amid crude oil prices rising above $100 per barrel, August retail inflation climbing to a 22-month high, rate hikes by the US Federal Reserve and the European Central Bank, and the rupee trading near 96 against the US dollar.
According to the poll, 100% of respondents expect the RBI to increase the repo rate by 25 basis points.
On the policy stance, 60% of respondents expect the MPC to retain a neutral stance, while 30% anticipate a shift back to withdrawal of accommodation. Another 10% believe the RBI could retain the current stance but modify its language to indicate the possibility of further tightening.
The majority of respondents expect the current rate-hike cycle to continue. About 60% forecast cumulative hikes of 50 basis points, while 30% expect a total of 75 basis points and 10% see the possibility of a full 100 basis points of tightening. Most respondents also expect the next rate increase to come as early as the December policy meeting.
Views on economic growth were divided. Half of the respondents expect the RBI to raise its FY27 gross domestic product (GDP) growth forecast to 6.8%-7%, while the remaining half see it increasing further to 7%-7.2%.
Inflation expectations, however, have shifted higher. Around 80% of respondents believe the RBI will raise its inflation forecast from 5% to a range of 5.1%-5.4%, reflecting the impact of elevated crude prices and weather-related risks, including drought conditions in Maharashtra.
Liquidity management is also expected to remain in focus. Half of the respondents expect the RBI to continue using Variable Rate Reverse Repo (VRR) operations to absorb excess liquidity. Around 30% do not expect any additional liquidity measures, while 10% foresee more open market operations (OMO) sales and another 10% expect a cash reserve ratio (CRR) hike.
Beyond the rate decision, respondents said they would closely monitor the RBI’s policy tone, inflation projections, guidance on the duration of the tightening cycle, further liquidity absorption measures and any macroprudential steps aimed at moderating lending in specific segments of the economy.
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