Repo Rate Hike: The Reserve Bank of India (RBI) will increase its prime interest rate by 25 basis points on 6 April. At the same time, recently SBI Research said in its latest Ecowrap report that the current 6.5 percent repo rate may be the final rate for now. Repo rate is the interest rate at which RBI lends money to all commercial banks.
In the February meeting held by the Monetary Policy Committee (MPC), the RBI raised the repo rate by 25 basis points to 6.5 basis points to stabilize inflation expectations, strengthen medium-term growth prospects to reach core inflation persistence. decided to do the percentage.
Raising interest rates is a monetary policy tool that usually helps suppress demand in the economy, thereby reducing the rate of inflation. In early 2020 when Covid hit the world, the repo rate was 4 per cent. It is expected that RBI may increase the repo rate now and then keep it constant for the rest of the year.
Retail inflation in India fell marginally but remained above the RBI’s 6 per cent upper tolerance band for the second straight month in February 2023. Retail inflation stood at 6.52 per cent in January.
