Analysts and economists are expecting the policy rate to rise to around 6.5 - 6.75 per cent, drawing from the RBI's hawkish stance.
The central bank on Wednesday delivered a fifth consecutive rate hike by increasing the repo rate by an expected 35 bps to 6.25 per cent.
"The bottom-line is that the policy announcement today signals that more rate hikes are in the offing. We expect the terminal rate to be close 6.5-6.75 percent," HDFC Bank chief economist Abheek Barua said in a note.
Tanvee Gupta Jain, UBS India economist, also sees another hike in the offing.
"We continue to expect another 25 bps hike in the February policy review... as even if headline inflation eases from 6.8 percent in October and to 5-5.5 percent by June 2023 quarter, it will remain sticky and stay above the RBI's medium-term target of 4 percent," she said.
Jain also expects the RBI to allow for orderly and gradual depreciation of the rupee to an 82-85 range in the rest of the fiscal.
Rajani Sinha, chief economist at Care Ratings, also feels that more tightening is in on the way, with a 25 bps hike in the February policy review.
"Going forward the policy decision will not just be dependent on domestic data but also global developments. As real interest rate moves to the positive territory, RBI would like to wait and watch the implications of the rate hikes so far. But given the looming uncertainties on inflation front, we feel that a further 25 bps rate hike in February cannot be ruled out," Sinha said.
Similarly, Rahul Bajoria, head of economics at Barclays India, said with the governor signalling that the battle against inflation is not over, a 25 bps rate hike is expected in February.
Moreover, he said, the MPC did not change its stance to neutral despite the significant tightening already done. The stance remains withdrawal of accommodation, although two members — Ashima Goyal and Jayanth Varma — voted against the stance.
"The lack of a shift to a neutral stance tells us that the committee still remains biased towards more hikes, but we believe the bar for further rate hikes is much higher, especially as we think real rates on an ex-ante basis can be considered to be in the tightening territory," Bajoria said.
Dharmakirti Joshi, chief economist at Crisil Ratings, said more hikes are on the way, adding that "given the current accommodative liquidity conditions, the RBI considers it necessary to continue to focus on withdrawal instead of going neutral."
He further said though domestically headline inflation has climbed down, core inflation remains a key risk, which does not permit the RBI to lower its guard.
Sunil Kumar Sinha, principal economist at India Ratings, also expects further rate increases though the size of the hikes will likely be smaller at 25 bps and the time gap between could be higher.
However, Soumya Kanti Ghosh, the chief economic adviser at State Bank of India Group, chose to take a contrarian view.
"We maintain a low probability of a February terminal 25 bps rate hike. However, that will also be accompanied with a change in stance to neutral, if it were to happen so," he said.