RAMYA SURYANARAYANAN, ECONOMIST AT DBS BANK IN SINGAPORE
"The 50 bps hike is in line with our expectations. Inflation has consistently surprised on the upside and there is little choice but for the central bank to send a strong tightening signal/anti-inflation stance as they have done.
"We expect a stand pat at the next meeting and then another 50 bps hike at the policy meeting in July though it is also possible there is a 25 bps hike at the next meeting and another 25 bps hike at the July meeting."
ABHEEK BARUA, CHIEF ECONOMIST, HDFC BANK, NEW DELHI
"There was a serious credibility issue with the Reserve Bank of India's inflation projection. This aggressive action addresses that issue. The RBI is talking more realistically about the inflation trajectory and responding a little more aggressively.
"It is a more adequate action than in the past. In the long term, it will help to curb inflation, but not immediately. We are expecting another 75 basis points hike in 2011."
RADHIKA RAO, ECONOMIST, FORECAST PTE IN SINGAPORE
"Sharp uptick in March WPI and rebound in weekly food and fuel measure justified the aggressive rate hike. Above expectations move will put to bed criticism that measured policy moves had blunted transmission to retail/interbank rates.
"Upward revision to WPI estimate and lowering growth were also timely, providing a more realistic economic outlook. We expect at least another 75 bps more hikes by end-year."
JAY SHANKAR, CHIEF ECONOMIST - DIRECTOR, RELIGARE CAPITAL MARKETS, MUMBAI
"We believe that the markets will take this faster tightening positively. However, inflation is likely to peak only at around 12 percent around Sept-Oct. The impact of higher oil prices still have to be factored in the headline numbers. This is a serious downside risk to our FY12 growth estimates.
"However, we would want to wait till the new IIP series is out in June - for the month of April, before revising our industrial and overall GDP growth estimates for FY12."
ASHUTOSH DATAR, ECONOMIST, IIFL, MUMBAI
"No real surprise on the central bank's thoughts on inflation. So we can now expect rates to be increased by at least another 50 basis points by end-2011. Further rate hikes will depend upon how commodity prices pan out and moderation in growth takes place."
Source : ET