Quote from Dr. Arun Singh, Global Chief Economist, Dun and Bradstreet on the repo rate hike

“A pause rate hike cycle could have supported the recovery of the domestic market at this juncture and worked in a favour of the businesses impacted by the rising borrowing cost. The pass through of the previous policy rate hikes to the lending rate remains incomplete. However, the high and sticky core retail inflation, the volatility of crude oil prices along with waning way of the moderation in domestic food prices remains a risk to the headline inflation which might have prompted the 25 bps rate hike today. It is crucial to nurture the growth impulses as the external economic environment remains difficult and uncertain while entrenched geo-political risks are increasing the protectionist measures levied upon by countries. We expect the Central Bank could resort to ‘wait and watch’ mode in its next policy meeting before signaling an end to its tightening cycle.”-Dr. Arun Singh, Global Chief Economist, Dun and Bradstreet