What Is Repo Rate? Rates Will Increase Further In The Coming Time Know The Special Thing


Repo Rate in India : The Monetary Policy Committee (MPC) of the Reserve Bank of India has increased the policy interest rate by 50 basis points. After which now the repo rate has increased to 5.40 percent. At this time inflation is increasing and the Indian rupee is weakening, it affects the economic conditions.

Understand repo rate like this
To tell you in simple language, the way people pay interest by taking money from banks for their needs. Similarly, all banks take loans from RBI. The rate at which RBI gives loans to banks is called Repo Rate. The rate at which banks pay interest to RBI on this loan is called repo rate.

Why was the rate increased?
Reserve Bank Governor Shaktikanta Das had told about this that the Indian economy has naturally been affected by the global economic situation. We are going through the problem of high inflation and our financial market is also unstable. Keeping these things in mind, the Monetary Policy Committee has decided to increase the repo rate.

Inflation needs to be controlled
The focus of RBI is to bring the rising inflation under control, keeping this in mind, it has increased its rates. Recently, a poll conducted by Reuters among foreign exchange strategists also concluded that in the coming days, the repo rate may increase by at least 0.35 percent in the RBI policy.

Repo rate indications by the end of 2022
RBI’s decision also indicates that RBI may increase rates in the coming days as well. According to sources, by December 2022, the RBI can increase the repo rate to 5.75 percent. Prior to this, RBI has increased the total by 0.90 percent in May and June. Meaning that the repo rate has increased by 1.4% in the last 4 months.

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