The RBI hiked the repo rate by another 50bp (to 5.90%) today and the communications give a clear steer that the tightening cycle still has further to run. But with inflation set to slow, we think the central bank will now revert to hikes of 25bp increments. In all, we think the repo rate will reach 6.40% by early 2023, which is a touch more hawkish than consensus expectations.
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