The reserve bank of India raised the interest rate by 50 points on Wednesday. The repo rate is hiked by 50 BPS to 4.9%. This has been done to check the soaring inflation. It is anticpated that this is going to spike the cost of borrowing for corporate delegates. This decision was took by the majority votes of 6 members of the Monetary Policy Committee headed by the RBI governor,
Shaktikanta Das. With one record, votes were the latest hike rate. These factors affected consumer price index-based inflation.
Shaktikanta Das has ensured the availability of adequate liquidity. It is high time to meet the requirements of the economy. This move by MPC is not surprising since many economists had expected a rise in the rate by 40BPS. This rise for the 2nd time in 5 weeks will be changing growth dynamics.
Rahul Bajorie, A chief Indian economist expects that based on current moves if the inflation outlook does not improve then there will be a high chance of an increase in the rate again.
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