Dr. Arun Singh, Global Chief Economist, Dun and Bradstreet

“The Reserve Bank of India’s sudden move to hike the policy rate and CRR has surprised many and is the indication of a scenario where inflationary conditions are set to worsen. It appears that RBI is under pressure and playing a cautious role as geopolitical risks are aggravating and supply chain disruptions are becoming protracted. As the spillover effects of the conflict are likely to intensify, further fuelling inflationary pressures, another increase in the policy rate in near future cannot be ruled out. Borrowing costs which had already started increasing after the introduction of the standing deposit facility are set to increase further. Companies, especially small businesses will be significantly impacted from higher commodity prices and high cost of borrowing.”