New Delhi : The Reserve Bank of India (RBI) today (Wednesday, June 8, 2022) hiked the benchmark policy rate repo rate by 50 basis points or 0.5% (RBI Repo Rate Hike). As a result, the repo rate is now 4.90%. To curb rising inflation in the country, the RBI has hiked the policy repo rate that the RBI lends to banks by 50 basis points to control the credit flow to the economy. This decision will make borrowing from banks more expensive. Earlier on May 4, the RBI governor had announced that the policy repo rate would be increased by 40 basis points to 4.40% to control the credit flow in the economy. This information was given by RBI Governor Shaktikanta Das at a press conference.
The RBI has raised its inflation forecast for the current fiscal to 6.7%. Earlier, inflation was projected at 5.7%. RBI Governor Shaktikant Das said that the RBI was now working to reduce inflation. Various measures are being taken for this. Tomato and crude oil prices have risen sharply in the international market. Therefore, it has resulted in rising inflation. Inflation is expected to rise to 6% in the first three quarters of the current financial year. Meanwhile, measures taken by the government are expected to bring down inflation.
The RBI, meanwhile, said it had taken retail inflation into account when deciding monetary policy. Retail inflation stood at an eight-year high of 7.79% in April. This rate is many times higher than the satisfactory RBI rate. It is understood that the RBI has received instructions to keep the retail inflation rate between 2 and 6%.
Meanwhile, the RBI has maintained its growth forecast for the current fiscal at 7.2% for 2022-23. RBI Governor Shaktikant Das told a press conference that India’s economy was doing well despite the economic downturn in many parts of the world. He said the repo rate is now how much lower than it was in the Covid epidemic. Demand is growing in cities. Rural areas are slowly improving, he said.
