Will RBI Start Raising Rates From June? Devang Shah Weigh In

The Reserve Bank of India is facing one of its toughest macroeconomic challenges in recent years as rising crude oil prices, foreign fund outflows, and currency volatility put pressure on the economy. Experts believe the RBI has handled the rupee depreciation effectively so far by using multiple tools, including liquidity measures and buy-sell swap facilities, to avoid panic in financial markets. Unlike the 2013 taper tantrum period, analysts say India’s macro fundamentals remain relatively stronger today. However, markets are increasingly pricing in aggressive rate hikes as inflation fears rise globally. With crude oil prices remaining elevated, experts warn that the RBI could begin a gradual rate hike cycle as early as June or August. The central bank’s next policy moves will now be closely watched by investors and markets alike.