The Reserve Bank of India on Wednesday raised its policy rate for the first time in more than four years, due to inflation concerns, but kept its policy stance as 'neutral'.The monetary policy committee lifted the repo rate by 25 basis points to 6.25 per cent, the first increase since January 2014, as predicted by 46 percent of respondents in a Reuters poll this week. All six members on the rate panel voted for an increase.The reverse repo rate was also raised by 25 basis points to 6.00 percent. Before Wednesday, the last policy rate change was a 25 bps cut in August 2017.Here's how different Dalal Street experts and India Inc 's captains reacted to the RBI rate hike.I do not think there were any surprises in the policy. I think my expectation was that in the course of the year we would see either a 25 or a 50 bps hike in rates. Out of that 25 has already happened and therefore one should perhaps expect that in the remaining part of the year till December another 25 bps hikes in rates is something which is possible.Sensible and cautious response to the risks that have unfolded since the last meeting. This is not likely to be end of the hike cycle as domestic price risks such as MSP hikes and firm global commodity prices would warrant further monetary action.The RBI had only one of two choices -- either it raised the rates and kept the stance neutral or they kept the rates where they were and had a hawkish stance. They have chosen the former. The real question is that keeping a neutral stance means that we are really uncertain of what is going to be happening. Frankly I would wait until that decision would be taken.From a debt market point of view with one-year T-bill at 7%, debt market has not only priced in this rate hike, but also couple of more rate hikes to come. The spread between repo rate and T-bill over last 10 years has been about 25 bps. Key is now, is market pricing in another two rate hikes -- sufficient, non-sufficient -- will the trajectory of inflation be higher than what was forecasted by the RBI earlier, what will be the impact, how will they consider the impact of MSP increases or oil price increases?RBI Governor changed the rate little higher, as at this juncture that was the best thing to do. India is in a situation where anything sharp can hurt economy. If we raise the Interest rates too fast & too sharp ,and try tightening the money supply it can hurt the corporate earnings, which are just about on cusp of expanding. Lowering of interest further was not the case at all as global volatility due to CRUDE and rate tightening never offered that option.We remain confident that this will be a shallow rate hike cycle if the present conditions do not deteriorate significantly. We expect the RBI to hike by another 25 bps in the August policy but the call will hinge on how crude and the rupee movements pan out over the next few months, as well as, the extent of MSP hikes. We need to carefully look at the RBI minutes and observe the extent of upward pressure on food prices in the near term, risks of fiscal slippages, domestic growth recovery, and evolving global macro conditions (trade wars, DM monetary policy cycle, and commodity prices) to have greater clarity on the extent of RBI’s rate hike cycle.RBI’s unanimously delivered 25 bps hike has been balanced with a neutral stance, reinforcing MPC’s alacrity to retain inflation within its 4% target. This stance allows RBI the choice to act in accordance with evolving macro and financial conditions, in both global and domestic economy in the coming months. Amidst many moving parts, this will entail a careful balancing of global headwinds from elevated crude prices, geopolitical tensions, and domestic policies of MSPs, state pay commissions on growth-inflation dynamics.While the rate hike was a largely discounted event, the increase from 11% to 13% SLR for LCR purposes, comes a potential demand deterrent for GSecs. With no great triggers for yields to ease, we could expect long-bond yields to remain at elevated levels. Short-end may get respite to reduced LCR related issuances, so we could expect some easing at shorter end of the yield curve. Prudence demands to stay at short end of the yield curve and continue to favour accruals over durationRBI’s rate hike by 0.25% to 6.25% is guided not by domestic factors but because of global monetary tightening policies adopted by developed and developing countries alike. Had RBI not raised the interest rate, there could have been dollar exodus, which is not in the interest of our country, where 80 per cent of crude oil requirements are imported. Rate hike is therefore in a way to control inflation albeit indirectly.With core inflation remaining stubborn and higher oil prices posing a risk, the Monetary Policy Committee unanimously hiked the repo rate by 25 bps. However, the central bank persisted with the neutral stance, defying the prior expectations of a tilt towards a hawkish tone.A status quo on the neutral stance has given birth to the expectations that the central bank will go slow on the future rate hikes, possibly implying a pause on the rates till the end of this calendar year.The decision was generally expected ever since the release of the last monetary policy committee meeting minutes indicated that the committee members were leaning towards a hike in policy rates. The markets will probably take solace in the fact that the central bank continues to maintain a neutral stance and has not moved towards a removal of accommodation stance.This suggests that, unless further inflation prints are significantly higher, the August committee meeting may keep policy rates unchanged. Higher inflation in the immediate future could however increase the probability of a further increase in policy rates.Clearly, the risk to rate sensitive sectors, banking NBFC, reality, cap goods, have materialised as expected. We believe as the expectations on future hikes materialise, these risks can become more relevant. The key thing to watch is whether growth recovers strong enough to compensate for rising rates. We maintain our view that fair value for 10-year GSec is at 8.4 per centThe RBI decision to hike rates is a step in the right direction. The policy is hawkish on inflation but we like the confidence shown in the economy growth. Despite inflationary pressures RBI has stuck to its growth projections and guided for robust investment activities for FY19. Despite the hike, the stance is still neutral , which is good . This putsRBI ahead of the curve.RBI has merely done what the broader macro was dictating. Expectedly, it has flagged off higher risks on inflation – with 4.8 and 4.9% for the first two quarters and 4.7% for the second half of the year. All in all, there was more meat in the “non-policy” parts of the statement (on priority sector treatment of housing loans, valuation of SDL by banks etc) than on the policy front, which was largely what the macro environment is dictating. Expect Indian yields to remain elevated, with an upward bias.Rate hike is pre-emptive and in line with the Reserve Bank of India's neutral-to-hawkish policy tone. The RBI has sounded more sanguine over growth prospects going forward, while flagging upside risks to inflation, particularly emanating from higher crude oil prices and the wage-price setting process due to closure of output gap.Expect one more rate hike before the end of calendar year 2018 if core inflation remains elevated despite some potential moderation in growth.The RBIs decision to increase repo rates by 25 bps to 6.25% after 4 years speaks of a carefully deliberated decision in light of the recent inflationary pressure on the economy.The hike may seem to dampen sentiments in the market but in terms of real estate it may have little or no impact. As almost all home loans these days are on floating rates, the rise and fall in home loan rates does not impact the performance of residential real estate sector much and tends to balance each other out over long term.We were already pricing in a 40 per cent probability of a rate hike in this policy, and 50 bps rate hike in FY19. We do expect one more rate hike by the Monetary Police Committee over the next few months, most likely in August, if oil prices continue to remain higher.I was not expecting the hike to happen this month, but was expecting it in August. If the current trend of increasing inflation and oil prices continues, we expect another 25 bps hike somewhere during the year. The committee seems to be pretty clear that there should not be an effect from the rate hike on economic growth.During this calendar year, the Reserve Bank of India is unlikely to do any further rate hikes, and beyond that, it will be extremely data-dependant. With the normal monsoons, we don't see much upside to oil prices from the current level, and also we expect the industrial production growth to falter after few months of pretty strong growth. We don't see further strengthening of inflationary forces, but we see some weakening of growth parameters.(With inputs from Reuters)