24 C
Guwahati
Friday, April 19, 2024

RBI hikes repo rate, GDP growth estimate lowered

Must Read

Batori24 Bureau
Batori24 Bureau
Batori24 is a Vernacular based Assamese news portal based in Guwahati Assam. We are a dedicated news channel covering news and stories across the globe with special reference to Assam, north-east along with National and International news.

RBI hikes repo rate:  The central bank retained its 6.7% inflation forecast for the current fiscal year, which ends in March while stating that the fight against inflation is far from over. The central bank reduced its growth forecast to 6.8% from 7% previously. Prior to today’s hike, the RBI had raised rates by a total of 190 basis points since its first unscheduled mid-meeting hike in May, and at least two more rate hikes are expected in the current cycle, including today’s.

Also Read: Assam: CM inaugurated projects worth ₹693.29 cr in Bongaigaon district

The Reserve Bank of India’s Monetary Policy Committee (MPC) raised the key policy rate, the repo rate, or the rate at which the RBI lends funds to banks, by 35 basis points to 6.25 percent on Wednesday (December 7), signalling a further rise in lending and deposit rates.

 

The MPC also reduced its growth forecast for the current fiscal year to 6.8 percent from 7% due to concerns about the “bleak” global economic outlook, while maintaining its retail inflation forecast at 6.7%.

RBI repo rate hike:

The increase in the repo rate, the fifth since May 2022, was approved by a majority vote of the six-member MPC, led by RBI Governor Shaktikanta Das, with five members recommending it. The MPC also decided, by a vote of 4 out of 6 members, to keep the focus on accommodation withdrawal.

Bank lending rates are expected to rise as the cost of funds continues to rise. Vehicle, home, and personal loan EMIs will also rise. Banks’ external benchmark linked lending rate (EBLR) will rise by 35 basis points (bps) — one basis point equals one hundredth of a percentage point — because such loans are linked to the Repo rate. The Repo rate is now linked to as much as 43.6 percent of total loans.

 

Following the increase in repo rates, banks are likely to raise interest rates on various loans. Borrowers are the most affected by these rate increases. Borrowing costs rise, and banks pass the cost on to borrowers. Having said that, EMIs are likely to rise in the near future.

After the Reserve Bank of India raised lending rates by 35 basis points and sounded a hawkish note about the inflation outlook, Indian government bond yields rose, with the benchmark 10-year yield reaching 7.30%.

The 10-year benchmark bond yield was last at 7.29 percent, four basis points higher than the previous close. Bond prices and yields move in opposite directions. Bond traders said the initial weakness was due to Das’s repeated concerns about persistent and sticky core inflation.

The rupee was last trading at 82.62 per US dollar, unchanged from the previous close.

 

- Advertisement -
- Advertisement -

Latest News

Bhupen Borah heads to Jorhat, to face police Inquiry amid Political turmoil

Police in Jorhat have summoned Assam Congress chairman Bhupen Borah to appear before them on January 31 in relation to a case involving the Bharat Jodo Nyay Yatra, which is suspected of deviating from its approved route in the district.
- Advertisement -

More Articles Like This

- Advertisement -