The Executive Vice-President and Head of Global Markets Group, IndusInd Bank, Mr Moses Harding, said: “The RBI’s stance will ensure post policy price stability with 10-year benchmark yield in consolidation mode within 8.3-8.4 per cent but with an upward bias into 8.45 per cent. The major impact will be on the shorter end of the rate curve where 9-12 month interest rates will have upward shift by 25 bps; thus making funds costly for the borrowers leading to further squeeze in the operating margin.’’

He added: “The stock market will stay cautiously range bound with Nifty in two-way consolidation mode within 5,300-5,500 with mild downward pressure for extended weakness into 5,170-5,200 where strategic investments are expected to flow in. The interest rate play on exchange rate will keep rupee strong but in consolidation mode within 44.65-45.15 taking external cues for directional guidance. The take away is to stay prepared for more rate hikes as there are not enough strategies to anchor inflationary pressures with pipe-line price hike on petroleum products and uncertainties on the import effect on inflation.’’

Mr Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, said: “RBI will continue to hike the policy rates in a calibrated manner till the time inflation comes closer to its short-term targets. It will keep the power dry for at least the next two policy meetings. The cost of capital is likely to remain higher in India for some time now. ‘’

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