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RBI repo rate: RBI hikes repo rate by 50 bps to 5.9%; FY23 GDP forecast cut to 7%

New Delhi: RBI has hiked the repo rate for the fourth time in a row. The central bank has increased the policy interest rate by 50 basis points. With this, the repo rate has reached 5.90 percent, which is the highest in three years.

By Priyanka Verma 
Updated Date

New Delhi: RBI has increased the repo rate for the fourth time in a row. The central bank has increased the policy interest rate by 50 basis points. With this, the repo rate has reached 5.90 percent, which is the highest in three years. Repo rate is the rate at which RBI gives loans to banks. Due to this increase, all types of loans including home loans will become expensive. In the meeting of the Central Bank’s Monetary Policy Committee (MPC), it was decided to increase the repo rate.

Also Read :- RBI hike repo rate by 50 bps to 4.90% from 4.4%; 2nd hike in 2 months, retains GDP forecast

Let us tell you that after an unexpected increase of 40 basis points in the repo rate in May, the RBI has increased the repo rate by 50 bps in the months of June and August. In this way, this is the fourth consecutive increase made by RBI. The increase in the repo rate by the RBI will increase the EMI of other loans like your home and car loan.

RBI Governor Shaktikanta Das while announcing the hike in repo rates said that the Monetary Policy Committee has decided to hike by 50 basis points. After this decision, now the repo rate has increased from 5.40 percent to 5.90 percent. RBI Governor Shaktikanta Das said that many sectors of the economy are seeing improvement. However, he also indicated that core inflation is expected to remain at higher levels. Shaktikanta Das has said that there is a gradual recovery in demand and there is a pick-up in investment.

The RBI governor said that inflation is around 7 per cent and is expected to be around 6 per cent in the second half of the year. “Inflation is expected to be 6.7 per cent. In such a situation, the MPC will have to be cautious in view of the current circumstances. Shaktikanta Das said that the GDP in the first quarter grew by 13.5 percent year-on-year.

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