Reserve Bank of India has decided to increase the repo rate by 50 basis points. After this decision of RBI, now the repo rate has increased from 4.9% to 5.40%. It has been said from the Central Bank that the decision will be applicable only with the current effect. RBI Governor Shaktikanta Das has given information about this decision. Earlier, since August 3, the RBI committee on this matter was brainstorming on this issue.
The RBI Governor has announced this decision after the meeting of the MPC (Monetary Policy Committee) which lasted for three days (August 3 to August 5). It was being feared that the RBI may increase the repo rate once again in this meeting. Let us tell you that in the last MPC meeting, it was decided to increase the repo rate. In the MPC meeting held in May, the repo rate was increased by 50 basis points to 4.90%.
Giving information about this decision of the central bank, Governor Shaktikanta Das has said that the Indian economy has naturally been affected by the global economic situation. We are facing the problem of high inflation. We have seen a large portfolio inflow of US$ 13.3 billion during the current financial year till August 3.
He said, “RBI has increased the repo rate by 50 bps to 5.4% with immediate effect. Real GDP growth forecast for 2022-23 is 7.2% with Q1- 16.2%, Q2- 6.2%, Q3 -4.1% and Q4- 4% with broadly balanced risks. Real GDP growth is estimated at 6.7% in the first quarter (Q1) of 2023-24. RBI Governor said, ‘Inflation is estimated to be 6.7% in 2022-23. CPI inflation for the first quarter of 2023-24 is estimated at 5%.
Inflation over 7.1%
Let us inform that the rate of inflation in the month of June was 7.01%. For the sixth time in a row, the rate of inflation has exceeded the RBI’s fixed limit of 6 per cent. Earlier in the month of May, the retail inflation rate was 7.04. On the other hand, the central bank RBI has also increased the inflation rate for the year 2022-23 from 5.7 percent to 6.7 percent.
How does repo rate work?
The Reserve Bank of India uses the repo rate to control the flow of money in the market. When the market is in inflation mode, the RBI increases the repo rate. The increased repo rate means that the banks which take money from RBI will be made available that money at an increased rate of interest.
Loan EMI will be expensive due to increase in repo rate
In such a situation, due to increase in interest rate, banks will take less money from RBI and the flow of money in the market will remain under control. If banks take loan from RBI at expensive rate, then they will also issue loan to common people at expensive rate. Due to this, the EMI of the common man will be expensive. In view of this, people will take less loan and spend less. This will reduce the demand in the market and will help in controlling inflation through the whole process.
Expansion
Reserve Bank of India has decided to increase the repo rate by 50 basis points. After this decision of RBI, now the repo rate has increased from 4.9% to 5.40%. It has been said from the Central Bank that the decision will be applicable only with the current effect. RBI Governor Shaktikanta Das has given information about this decision. Earlier, since August 3, the RBI committee on this matter was brainstorming on this issue.
The RBI Governor has announced this decision after the meeting of the MPC (Monetary Policy Committee) which lasted for three days (August 3 to August 5). It was being feared that the RBI may increase the repo rate once again in this meeting. Let us tell you that in the last MPC meeting, it was decided to increase the repo rate. In the MPC meeting held in May, the repo rate was increased by 50 basis points to 4.90%.
Giving information about this decision of the central bank, Governor Shaktikanta Das has said that the Indian economy has naturally been affected by the global economic situation. We are facing the problem of high inflation. We have seen a large portfolio inflow of US$ 13.3 billion during the current financial year till August 3.
He said, “RBI has increased the repo rate by 50 bps to 5.4% with immediate effect. Real GDP growth forecast for 2022-23 is 7.2% with Q1- 16.2%, Q2- 6.2%, Q3 -4.1% and Q4- 4% with broadly balanced risks. Real GDP growth is estimated at 6.7% in the first quarter (Q1) of 2023-24. RBI Governor said, ‘Inflation is estimated to be 6.7% in 2022-23. CPI inflation for the first quarter of 2023-24 is estimated at 5%.
Source link