The RBI’s MPC hiked the policy repo rate by 50 bps to 4.9% in today’s meeting amidst the intensification of the inflationary pressures. The MPC also voted to “focus on withdrawal of accommodation”, dropping “to remain accommodative” from the policy stance. The RBI reiterated its approach of focusing on the gradual and calibrated removal of excess liquidity. It retained its FY23 growth projection at 7.2% but revised its FY23 inflation projection sharply upwards by 100bps to 6.7%, given the broadening of inflationary pressures. A sharp upward revision in the inflation projection and change in the stance suggests RBI’s hawkish leaning. Accordingly, we expect the RBI to continue with rate hikes in the upcoming meetings.