RBI to moderate interest rate hikes, says chamber

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RBI to moderate interest rate hikes, says chamber

The Reserve Bank, which has hiked the key policy rate by 190 basis points since May, is going to moderate the interest rate hikes so that it does not have an adverse impact on the next set of monetary policy, according to an industry body on Friday.

The central bank will announce its decision on December 7th by the Monetary Policy Committee on December 7. At most, the new rate hike should not exceed the 25 -- 35 basis points band, according to a letter to the RBI Governor, along with other issues that are important to the industry.

One of the recommendations that the chamber has pushed to the RBI is to treat retail loans for purchase of Electric Vehicles as priority sector lending with a concessional rate of interest.

On September 30, the RBI had hiked the key policy rate repo by 50 basis points in order to check inflation, which continues to be its upper tolerance band of 6 per cent since January of this year.

It was the third consecutive hike of 50 basis points bps before the September hike, the central bank had raised the repo rate by 50 bps each in June and August, and 40 bps in May.