It may be noted that inflation in India has remained above the targeted 6 per cent since January this year. This is the first time when the RBI has hiked the lending rate since August 2018.
Mumbai: In an unscheduled policy review, the Reserve Bank of India (RBI) on Wednesday announced a hike in the repo rate by 40 basis points and cash reserve ratio (CRR) by 50 basis points.
With the announcement, the new repo rate will stand at 4.40 per cent and the CRR at 4.5 per cent. The repo rate is the rate at which the central bank lends money to commercial banks while the CRR is a certain minimum amount that banks have to deposit as reserves with the central bank.
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RBI Governor Shaktikanta Das, in a press conference in Mumbai, said that the decision to this effect has been taken in view of inflation as it will help to contain it. He said that geopolitical tension is The RBI Governor added that geopolitical tension has pushed inflation and “global economic recovery is losing momentum”.
He also hinted that the inflation print in April is also likely to be high. “Shortages, volatility in commodities and financial markets are becoming more acute,” added Das.
It may be noted that inflation in India has remained above the targeted 6 per cent since January this year. This is the first time when the RBI has hiked the lending rate since August 2018.
