Economists are pencilling in a 25-50 basis points hike in the policy repo rate in August. They said the Reserve Bank of India (RBI) is likely to continue with its front-loading steps to control inflation that is expected to witness upward pressures despite the recent cooling of commodity prices including crude oil.

Experts remain divided on when the monetary policy committee (MPC) of the RBI will stop hiking rates to protect growth. While some feel this will happen only in early 2023, others are of the view that the interest rate-setting body will take a step back to see how inflation pans out after October this year.

Retail inflation in June moderated slightly to 7.01 percent from 7.04 per cent in May, thereby remaining above the RBI’s upper tolerance limit of 6 per cent for the sixth month in a row. This has set the stage for another round of rate hike in the MPC meeting from August 2 to August 4. However, given worries about some of the global economies slipping into recession and its impact on the domestic economy, some economists are of the view that the MPC will not aggressively hike rates.

Speaking at an event in Singapore on Tuesday, Shaktikanta Das, RBI governor, said that the MPC always factors in growth requirements for the economy and that the growth sacrifice should be within the manageable limit. The policy should not lead to a situation where the economy faces a massive slowdown, he said.