Retail Inflation Rate: RBI may increase its bi-monthly monetary policy review (MPC) by 0.25 percent next month as part of an effort to reduce inflation.
Repo Rate Hike: If you have taken a home loan or are planning to take a car loan, then this news can shock you. Yes, the Reserve Bank of India (RBI) can increase the policy rate (repo rate and reverse repo rate) in the next monetary policy review. RBI may increase its bi-monthly monetary policy review (MPC) by 0.25 percent next month as part of an effort to reduce inflation. This hope has been expressed in the report released by DBS Group Research.
Repo rate increased by two and a half percent
RBI has increased the repo rate by two and a half percent since May last year to control rising prices. The repo rate has increased by 0.25 percent to 6.50 percent in February. In an online session on economic growth and inflation, Radhika Rao, executive director and senior economist at DBS Group Research, said the RBI may hike the policy rate by 0.25 per cent in April as retail inflation is still high.
Inflation rate has remained above 6 percent
The retail inflation rate was 5.72 percent in December 2022 while it increased to 6.52 in January 2023. However, it softened slightly to 6.44 percent in February. Rao said that inflation caused by supply-side constraints cannot be tackled by monetary policy alone. He said, ‘Weather conditions are important for the agriculture sector. The local Meteorological Department said that the next three months could see high temperature…The monsoon coming in June-July is important…’
