The Reserve Bank of India may increase the repo rate by up to 50 basis points in its policy statement on September 30 after a 75 basis points rate hike by the US Federal ReserveFederal Reserve earlier this month, according to a majority of respondents in a Business Today poll. The policy announcement is to be made on Friday, September 30, 2022, and will start on the next meeting of the Monetary Policy Committee MPC.
The majority of participants voted for an increase of 50 bps from the current rate of 5.4 per cent. More than half of the participants who participated in the poll said RBI could increase the rate by 50 basis points. Twitter: 72.5 per cent, Linkedin: 57 per cent, Youtube: 58 per cent, Instagram: 29 per cent and the others expect it to increase by 25 -- 35 bps with the small percentage voting for no hike.
RBI has increased the repo rate three times since May. The key policy rate has gone from 4 per cent to 5.40 per cent during this period. If RBI increases rates by 50 bps in this policy, the repo rate could reach 5.90 per cent.
The Fed hiked interest rates in the previous two meetings, which may lead to an increase in the US interest rate by 75 bps points due to the unexpectedly high inflation number for August at 8.3 per cent. The inflation rate is high, which is 7 per cent, well above the RBI's upper margin of 6 per cent for the eighth consecutive month. The MPC will be a subject to a decision on Friday, based on experts who say that the strengthening dollar will be weighed down by geopolitical concerns in Europe.
A rise in repo rates could affect those who have taken out loans at floating interest rates. As the cost of borrowing increases for banks, it leads to a proportionate rise in lending rates, according to your car, personal and home loans.