RBI hikes repo rate, EMIs set to rise : The Tribune India

Join Whatsapp Channel

RBI hikes repo rate, EMIs set to rise

RBI cautions people on unregistered apps | Pandemic-era accommodative stance dropped | Expect more rate hikes | RBI Guv bats for cut in state taxes on petrol, diesel | Sensex falls 215 points in volatile trade

RBI hikes repo rate, EMIs set to rise

Shaktikanta Das, RBI chief

Tribune News Service

New Delhi, June 8

Home, auto and other loan EMIs are set to go up as the Reserve Bank of India (RBI) today hiked its lending rate to banks (repo rate) by 50 basis points to 4.9 per cent to rein in inflation.

This is the second increase after five weeks when the central bank had increased repo rate by 40 basis points to 4.4 per cent.

The RBI’s Monetary Policy Committee also shifted its stance to withdrawal of accommodative policy of easy lending to check inflation, which will remain above the upper threshold of 6 per cent all through the current fiscal (2022-23).

Key economic projections

4.9%repo rate: After latest hike of 50 basis points

6.7%inflation: Projection for thecurrent fiscal

7.2%GDP growthforecast retainedfor 2022-23

Sensex falls 215 points in volatile trade

“The inflation projection for the current fiscal has been raised to 6.7 per cent from 5.7 per cent,” said the RBI chief Shaktikanta Das at a press conference.

The expectation is that inflation will drop below 6 per cent after December, but the RBI chief cautioned the tense global situation is imparting considerable uncertainty to domestic inflation outlook.

While it has become clear that the RBI will be unable to keep the inflation rate within the band of 4 to 6 per cent during the current fiscal, Das also put the onus on the Centre to take supply-side measures as well. Higher interest rates are not good for the economy, especially for corporate and retail borrowers,but low and stable inflation is a prerequisite for long-term sustainable economic growth. The current daily surplus liquidity at Rs 7 lakh crore is very high compared to Rs 2.5 lakh crore during the pre-pandemic days.

Inflation must come down

Our rate and other actions are calibrated to evolving inflation-growth dynamics. Inflation must come down, economic recovery must also continue. Shaktikanta Das, RBI chief

Proactive steps

Various steps helped keep the economy afloat in difficult times and targeted approach during pandemic helped citizens. Nirmala Sitharaman, FM

The RBI chief, however, assured that the withdrawal of liquidity would be calibrated and measured and adequate liquidity to meet bank credit requirements would be ensured.

The RBI put the GDP growth forecast for the current fiscal at 7.2 per cent, 30 basis points less than the World Bank’s latest estimates. The figures for 2021-22 (last fiscal) are estimated at 8.7 per cent.

The RBI chief also announced a spate of initiatives to boost economic activity such as doubling housing loans by cooperative banks, allowing rural cooperative banks to lend to commercial real estate and permitting urban cooperative banks to offer doorstep banking.

About The Author

The Tribune News Service brings you the latest news, analysis and insights from the region, India and around the world. Follow the Tribune News Service for a wide-ranging coverage of events as they unfold, with perspective and clarity.

#rbi #shaktikanta das

Top News

Delhi court grants bail to Arvind Kejriwal in money laundering case linked to 'excise scam'

Delhi court grants bail to Arvind Kejriwal in money-laundering case linked to 'excise scam'

The judge directed Kejriwal to appear before the court whene...

CBI registered FIR into UGC-NET paper leak case

CBI registers FIR in UGC-NET paper leak case

According to complaint from Education Ministry, inputs from ...

UGC-NET cancelled: Dozens of students detained for protesting outside MoE, Pradhan's residence

NEET row rages further after UGC-NET cancellation; students stage protests, opposition attacks government

The cancellation of UGC-NET, amid the raging row over NEET, ...

7-term MP Bhartruhari Mahtab named pro tem Speaker

7-term MP Bhartruhari Mahtab named pro-tem Speaker

8-term Congress MP K Suresh among panel of MPs to assist the...


View All