Analysts raise bets on another bumper rate hike tomorrow

• FCR assigns 60% probability for rate hike between 100bp to 300bp 

Analysts are betting on another bumper rate hike at the next monetary policy review announcement due tomorrow morning.
First Capital Research (FCR) assigned a 60 percent probability for a rate hike between 100 basis points to 300 basis points, considering the heightened uncertainty and the early indications given by the Central Bank in the bond markets last week. 

The Central Bank last week allowed both Treasury bills and bond yields to move up as they could not suppress the yields as they did a fortnight ago by rejecting the bids received above a certain level.

Breaking down the 60 percent probability, FCR assigned a 25 percent probability for a 300 basis points hike, 20 percent probability for a 200 basis points hike and 15 percent probability for a 100 basis points hike.  Despite its tilt towards a further hawkish stance by the Monetary Board, FCR said there is still a 40 percent probability for the rates to remain unchanged.  

FCR correctly predicted Central Bank’s 700 basis policy rate hike on April 08, the largest by any central bank in the world in recent times.