The Reserve Bank’s decision to raise the benchmark lending rate by 35 basis points is on expected lines and indicative of softening of intensity of rate hikes going forward, opined industry bodies and experts on Wednesday.

After effecting three consecutive repo rate increases of 50 basis point (bps) each over and above 40 bps in May, the RBI on Wednesday slowed the pace of increase in borrowing costs in signs that rates may be nearing the peak, even as it reiterated its resolve to fight inflation that has stayed above the comfort zone for 10 straight months.

 FICCI President Sanjiv Mehta said the RBI’s policy action hiking the repo rate by 35 bps was widely anticipated as the war against inflation is still far from over.

“While the CPI inflation projection has been maintained at 6.7 per cent for 2022-23 and some early signs of inflation cooling down on a sequential basis are coming to fore, we need to see this trend emerge on a durable basis for RBI to indicate a change in stance,” he said.

 Industry body Assocham too said the 35 bps increase in the policy rate by RBI is on the expected lines, though there is a signal that the rate hike intensity “is being softened”.

 “Despite the challenges in the global economy and uncertainties with regard energy prices, supply chain and geo-political situation, India remains amongst the fastest growing economies of the world, as elaborated by RBI Governor Shaktikanta Das,” said chamber Secretary General Deepak Sood.

 The Reserve Bank on Wednesday also lowered the country’s GDP growth forecast to 6.8 per cent for the current fiscal from 7 per cent earlier, on account of continued geo-political tensions and tightening of global financial

conditions.

 India, however, remains a bright spot in the otherwise gloomy world and will be among the fastest growing major economies, said RBI Governor Das.

 Another industry body PHD Chamber said as inflation is cooling, a calibrated approach to maintain economic growth would be vital to attract investments.