Rate hikes, base effect may temper credit growth in medium term: Analysts

Credit growth stayed robust in October this year amid significant rise in interest rates

Even as an economic upturn may keep the demand for loans robust in the next few quarters, multiple interest-rate hikes and the base effect may moderate credit growth year-on-year in the medium term.

Soumya Kanti Ghosh, group chief economic advisor of SBI, said the analysis indicates that due to rate-hike cycle, the interest cost on retail and micro, small and medium enterprise (MSME) consumers will increase to around Rs 68,625 crore. A 1-basis point (bp) increase in the repo rate will have a combined impact of Rs 305 crore on consumers — both retail and MSMEs. This may impact