(Bloomberg) -- The Reserve Bank of India delivered a widely expected 35-basis-point interest-rate increase on Wednesday — a decision accompanied by hawkish rhetoric that signaled at least one more hike ahead.

While Governor Shaktikanta Das said “the worst of inflation is behind us,” he also said policymakers “will keep ‘Arjuna’s eye’ on the evolving inflation dynamics and be ready to act as may be necessary.” Das referred to the archer from the Indian epic Mahabharata to signal that he’ll keep a hawk’s eye on risks.

Here’s what analysts are saying about Wednesday’s Monetary Policy Decision, and what to expect:

Sakshi Gupta, principal economist at HDFC Bank

  • The policy announcement today signaled that more rate hikes are in the offing, she said. “We expect the terminal rate to be close to 6.5%-6.75% in this cycle”

Aurodeep Nandi, economist at Nomura Holdings

  • The split vote on the policy with one supporting a pause and two dissents against the current stance suggests “that the rate hiking cycle is nearing its end,” he said, adding that they see a final quarter-point hike in February followed by a hold. Nomura is now penciling in 75 basis points of cumulative cuts in the second-half of 2023, taking repo rates back to 5.75% by end-2023

Nikhil Gupta, chief economist at Motilal Oswal Financial Services

  • Cited the governor’s statement to say, it’s “clear that there will be at least one more rate hike” of 25 basis points in calendar year 2023

Rahul Bhuskute, chief investment officer at Bharti AXA Life Insurance

  • “Looking at the way yields have jumped on the shorter end, the market is now adjusting to the fact that there will likely be one more rate hike, and after that it really depends on the inflation trajectory. A lot of strategists and investors felt that the 4% inflation target may not factor as much into RBI’s calculations in the current environment, and questioned whether it was still sacrosanct. The fact that the governor mentioned that number shows a more hawkish tone.”

Soumyajit Niyogi, director at India Ratings and Research

  • The assessment of growth-inflation dynamics and communication suggest that the rate panel is not looking at 6.5% as the terminal rate as long as inflationary drivers are highly active. The RBI “doesn’t want to give any indication if they are close to end of the cycle, this is warranted given the market participants are building risky expectation of we are very close to rate hike cycle”

Churchil Bhatt, Kotak Mahindra Life Insurance Co.

  • “Even though headline CPI is likely to fall below the MPC’s upper tolerance band of 6% over the next few months, we remain some distance away from the ultimate policy goal of 4% headline CPI. Hence, while policy rates in India may not go much higher from here, the bar for any possible policy pivot remains high. In this backdrop, we expect the 10-year G-Sec to trade in the range of 7.25-7.45% in the near term”

--With assistance from Adrija Chatterjee, Subhadip Sircar, Malavika Kaur Makol, Anup Roy, Anirban Nag and Ruchi Bhatia.

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