RBI Meeting Begins with Speculation on Interest Rate Hike

The three-day meeting of the Monetary Policy Committee of the Reserve Bank of India (RBI) began in Mumbai on Monday. All eyes are on this meeting regarding the speculation of hike in policy interest rates. It is expected that in this a decision can be taken to increase the repo rates by 35 to 40 basis points. The meeting is being chaired by RBI Governor Shaktikanta Das and he will announce the decision of the Monetary Policy Committee after deliberations on Wednesday.

It is worth noting that Governor Shaktikanta Das has already indicated that the repo rate can be increased once more. Whereas by how many basis points he can increase it, this decision will be revealed only in the results of the meeting. But, there is speculation that the central bank may increase the rate by at least 35 basis points (bps) to 40 basis points.

It was told by the government that inflation is rising mainly due to increase in the prices of commodities including fuel. The prolonged Russian-Ukraine war has further pushed up commodity prices around the world whereas wholesale price-based inflation has remained in double digits for 13 months and touched a record high of 15.08 percent in April. In such a situation, to control this inflation, the Reserve Bank can take more decisions related to changes in interest rates.