Bank of Baroda Chief Economist Sabnavis on RBI Policy
This story was originally published at 13:04 IST on 7 October 2026
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MUMBAI - Madan Sabnavis, chief economist, Bank of Baroda, said the following on the Reserve Bank of India's fourth bi-monthly monetary policy statement for the financial year 2026-27 (Apr-Mar) detailed Wednesday:
The MPC (Monetary Policy Committee) decision to hike the repo rate by 25 bps (basis points) has been mainly due to inflationary concerns. As inflation is to rise and average 5.8% in the next three quarters, we can expect another 50 bps hike during this (financial) year with one more hike in December followed by one in February. The RBI has upped the GDP growth forecast, which is in line with ours, as is the projection on inflation at 5.2%. The interesting aspect of the policy is that the RBI has not announced any specific liquidity measures, which is indicative of the fact that the present approach of calibrating liquidity through the VRRR (variable rate reverse repo) route will continue. End
Compiled by Meera Nair
Filed by Rajeev Pai
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