RBI HIKES IN REPO RATE
REPO RATE –
Repo rate is the rate at which the reserve bank of India lends money to commercial banks or financial institutions in India against government securities.Inflation is the general increase in price level of goods and services in an economy. It results in the reduction of purchasing power of money to control the effect of inflation. The central bank of the country increases the repo rates or interest rates to control the flow of money in the market. Repo rates are the rates at which the commercial banks borrow money from central bank the increase in the repo rate denotes that now banks need to pay higher interest rates to the central bank and due to this the supply of money will reduce in the market.
There held the six-member monetary policy committee led under the governor of reserve bank of India MR. SHAKTIKANTA DAS, Deputy governor DR. MICHAEL DEBABRATA PATRA, executive director RAJIV RANJAN. Among all the members total four from the six members voted for the hike in the rates. According to the RBI governor, MR. SHAKTIKANTA DAS, The Battle against inflation is not yet over and therefore any pause in the rate hike could be a very costly decision.
As per the current situation of India the existing repo rate is 6.50% by increasing the rate by 25 basis points (1 basis point is 1/100) of percentage point. Also the GDP Growth rate of FY.2024 Estimate by RBI is 6.5% It is the seventh hike in repo rate since 2022-23 earlier in 7th DEC 2022 .The repo rate was 6.25% change .35% basis points
| EFFECTIVE DATE | REPO RATE | %CHANGE |
|---|---|---|
| 8TH DEC | 6.5% | 0.25% |
| 8TH JUN | 6.50 | 0.25% |
| 7TH DEC | 6.25% | 0.35% |
| 30TH SEPT | 5.90% | 0.5% |
