Inflation trajectory will determine extent of future rate hikes: ICRA

Rating agency ICRA has indicated that the trajectory of inflation will be crucial in determining the scope for additional interest rate increases going forward. According to Aditi Nayar, the agency's base case scenario expects headline CPI inflation to average around 5 per cent during FY27.

The projection carries upside risks, suggesting that actual inflation could exceed the central estimate. This assessment signals that the Reserve Bank's monetary policy decisions in coming months will hinge significantly on how price pressures evolve across the economy.