RBI rate hikes ahead? BofA sees 100 bps repo rate increase through H1 2027
Bank of America has revised its forecast for the Reserve Bank of India, predicting a 100 basis point increase in the repo rate through mid-2027. The shift is driven by a resilient domestic economy and broadening inflation risks.
Why it matters
Changes in central bank interest rates directly impact borrowing costs, investment demand, and overall economic growth in India.
The Reserve Bank of India (RBI) could raise interest rates by 100 basis points through the first half of 2027, according to Bank of America (BofA) Securities. The brokerage has also moved up its estimate for the first rate hike, now expecting the hike in October instead of December.BofA expects the RBI to raise the repo rate by 25 basis points at its October 7 monetary policy meeting, and then another 75 basis points of hikes, taking the projected terminal rate to 6.25 per cent.The new forecast is twice the size of BofA's earlier 50 basis point estimate.“Our bigger forecast shift is arguably the quantum of hikes, as we are raising our total quantum of hikes from 50bp earlier, to 100bp now,” BofA said.BofA expects the RBI to raise rates by 50 basis points in the fourth quarter of 2026 and another 50 basis points in the first half of…
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