RBI To Hike Rates 2–3 More Times To 6.25%? Gaura Sengupta's Big Warning On Inflation & Rupee Crisis

India's current inflationary pressure is primarily a supply-side challenge driven by food prices approaching 8% and global commodity surges linked to the West Asia crisis. Gaura Sengupta, Chief Economist at IDFC FIRST Bank, observes that while core inflation remains relatively low at 3.2%, price hikes are broadening across metals, chemicals, and electronics due to skyrocketing shipping costs. The Reserve Bank of India faces a complex landscape where currency stability, rather than just inflation, may dictate a more aggressive rate-hiking cycle; a terminal repo rate of 6% to 6.25% is expected unless the rupee's depreciation necessitates an "interest rate defense." Although the IMF forecasts 7% growth, the persistence of supply shocks and a weak monsoon pose significant risks to rural demand and corporate revenue growth in the coming quarters. Global capital flight, evidenced by $60 billion in emerging market FDI outflows, further complicates the domestic monetary trajectory.