Economists on Thursday expect the RBI to keep hiking rates back-to-back, as the October MPC minutes signalled a more hawkish tone that leans toward future risks and tightening. SBI Research still expects a 50 bps hike in December, either as a straight 50 bps repo increase or as a 25 bps repo hike combined with an asymmetric widening of the LAF corridor. Dr Soumya Kanti Ghosh of SBI warned that broadening inflation and persistent rupee weakness call for close RBI monitoring, while Radhika Rao of DBS Bank said the door stays open for a back-to-back hike in December as inflation is set to reach 6 per cent in CY Q4. The rupee has strengthened about 1.5 per cent against the USD this month on forex regulatory measures and IPO inflows, though bond yields remain high and may come under pressure again as oil supply fears return.
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