The Reserve Bank of India (RBI) is expected to raise the repo rate by 25 basis points (100 basis points is equivalent to 1 percentage point) during its ongoing policy meeting, which began Monday and will conclude tomorrow, according to an Emkay Global Financial Services report. This decision is likely to help curb rising inflation rates and ensure the growth of the Indian economy.
The Monetary Policy Committee, a nine-member committee of the RBI, reviews global and domestic macroeconomic factors such as growth, inflation, and liquidity to form its policy stance. As the rate hike would impose restrictions on bank lending, it can act as a monetary policy instrument to help bring the inflation rate down. This will be RBI’s second rate hike since May 2022, with the total rate hikes amounting to 250 basis points cumulatively as of now.
Emkay Global Financial Services is an India-based advisory firm that provides economic and capital market research to investors, companies and other financial institutions. The firm focuses on providing high-quality research and analysis of the Indian and global macroeconomic landscape to its clients. Its report for the recent RBI policy meeting was largely in line with the expectations of the market and the government.
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This RBI policy meeting is of utmost importance for the Indian economy and its financial markets, as the central bank sets the interest rates for the nation. This rate hike is also likely to provide some much-needed flexibility to the RBI in its forward guidance to the market. For individuals, it is important to track and stay informed of such policy changes in order to make better financial decisions.
