RBI Is All Set To Hike Repo Rates By 35 Bps - Viral Bake
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RBI Is All Set To Hike Repo Rates By 35 Bps

The Monetary Policy Committee, a committee of The Reserve Bank of India RBI led by the Governor himself that decides the key lending rates in India, will likely go for a 35 bps hike in its repo rates at the next scheduled meeting, as estimated by an American brokerage, Wednesday.

MPC RBI

RBI Likely To Hike Repo Rates

Along with the hike, there will be a slight change in the policy which is referred to as “calibrated tightening”, as per the Bofa Securities report, that is published ahead of the Monetary Policy Committee’s (MPC) decision which is set to be announced on August 5.

It only took two intense moves for RBI to increase the key lending rates by 0.90 per cent in May and June respectively, which was an act against surging inflation. The inflation rate had crossed the benchmarked level set by RBI.

Referring to the past actions of RBI since April, the brokerage believes that the Regulator had increased the lending rates by 1.30 per cent.

“In our base case, we now see the RBI MPC hike policy repo rate by 0.35 per cent, taking it to 5.25 per cent (higher than pre-pandemic level), with stance change to calibrated tightening from the withdrawal of accommodation,” the report suggests.

It is expected by the brokerage that MPC is going to retain the Consumer Price Inflation (CPI) rate of 6.7 per cent and GDP growth forecasts at 7.1 per cent for the financial year 2023.

“The MPC can adopt a more aggressive measure and deliver a 0.50 per cent rate hike as it did in June, joining some developed market and regional central banks who have sent stronger signals.”

29% Growth In Digital Payments Across Country

Digital Payments In India

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As per RBI’s indexed measures for online transactions, digital payments in India have seen a growth of nearly 29 per cent in March 2022.

The newly established Digital Payment Index (DPI) of the Reserve Bank Of India (RBI) has registered a rise of 349.3 in March 2022 from 304.46 registered in September 2021.

“The RBI-DPI index has demonstrated significant growth, representing the rapid adoption and deepening of digital payments across the country in recent years,” said RBI on Wednesday.

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Rishabh Sharma

Rishabh is an experienced content writer and editor, he is working for Viralbake to cover a diversified range of categories. His articles mainly focus on providing information, being a travel guide, educating others, and also making people aware of technology, after all, he is a technophile. When not writing he can be found gaming, watching movies, and travelling.

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