Business

RBI Likely to Raise Interest Rates by 25 Basis Points in Upcoming Monetary Policy Meeting

The Reserve Bank of India (RBI) is likely to announce a 25 basis point interest rate hike in its next monetary policy meeting which is to be announced on 6th March 2023. The move comes amid concerns about inflation, which has been rising in recent months due to a combination of supply chain disruptions and high global commodity prices. The Reserve Bank’s Monetary Policy Committee (MPC) will convene for three days on April 3, 5, and 6 to consider both domestic and global factors, and subsequently release the first bi-monthly monetary policy for the fiscal year 2023-24.

Central bank’s last policy meeting was held in February. The repo rate was raised to 0.25% in the meeting. Consumer price inflation (CPI) rose to 6.52 percent in January and 6.44 percent in February breaching the RBI’s upper limit of 4% for the second consecutive month.

Reportedly, the committee will focus on two main factors when deciding on the next monetary policy: high retail inflation and recent actions taken by central banks in developed countries, specifically the US Federal Reserve, Bank of England, and the European Central Bank. These factors will be given significant consideration during the committee’s deliberations.

The central bank is expected to use interest rate hikes to curb inflation that has been below 6% in November and December 2022. The RBI has already raised repo rates by 25 basis points on 8th February 2023, signaling its intent to tighten monetary policy. The benchmark repo rate currently stands at 6.50% with a hike of 25 basis points. Some experts have cautioned that a rate hike could hurt economic recovery. The RBI may need to strike a balance between curbing inflation and supporting growth, they say.

According to RBI Governor, Shaktikanta Das, there have been many challenges to the world economy due to the Russia-Ukraine war, pandemic outbreak, and the shocks given by the foreign monetary tightening. The situation of financial sectors in India is stable.

The RBI’s monetary policy committee is set to meet in early April to review the policy stance. Analysts will closely watch the committee’s statements and projections for clues about the central bank’s future moves.

Shruti Rag

Recent Posts

Musk-Trump Fallout Threatens NASA And Pentagon Operations: Report

A recent fued between Elon Musk and former US President Donald Trump has raised serious…

22 mins ago

Rajeshwar Singh Honoured With ‘Excellence In Political & Public Life’ Award At House Of Lords

Rajeshwar Singh was honoured with the ‘Excellence in Political and Public Life’ Award at the…

23 mins ago

EaseMyTrip Launches ‘EMT Invest’ To Back Profitable Businesses: CEO Nishant Pitti

India’s leading travel tech company, EaseMyTrip, has launched a new investment platform named ‘EMT Invest’,…

30 mins ago

MyGov Launches Exciting Contests To Celebrate 11 Years Of Transformative Governance

Marking 11 years of transformative governance, citizen engagement platform MyGov has launched a series of…

3 hours ago

President Murmu And PM Modi Extend Eid Al-Adha Wishes, Call For Unity And Service

On Saturday, President Droupadi Murmu and PM Modi extended warm wishes to citizens on occasion…

3 hours ago

JD Vance Resignation Claim Is False; Confirms No Credible Source

Viral claims about US Vice President JD Vance resigning due to tensions between Donald Trump…

4 hours ago