The Daily PulseBusiness
RBI likely to raise key interest rate in October policy review
Reported by Kunal Bhatia (Senior Writer) · Economic Times - Markets ·
Confirmed by a second source: The Hindu - Business
Representative image · PexelsRBI likely to hike repo rate by 25 bps to 5.50% in October policy: ET Poll. RBI likely to hike repo rate by 25 bps to 5.50% in October policy: ET Poll RBI likely to hike repo rate by 25 bps to 5.50% in October policy: ET Poll On Monday, the Reserve Bank of India's Monetary Policy Committee will hold important meetings. Analysts are anticipating a 25 basis points increase in the key interest rate, raising it to 5.50%. The surge in inflation is attributed to elevated crude oil costs and subpar agricultural production. Many economists advocate for a rate hike as a crucial measure to tackle ongoing inflation issues, with outcomes to be revealed on October 7. On Monday,
ExplainerWhy this matters
What Happened
Economists and market analysts expect the Reserve Bank of India to raise its benchmark repo rate by 25 basis points during its October monetary policy review, driven by mounting inflation pressures.
Why It Matters
A higher repo rate increases the cost of borrowing for commercial banks, which typically leads to higher interest rates on home, car, and personal loans for everyday consumers. At the same time, it helps cool down rising prices of goods and services by reining in money supply in the broader economy.
What Happens Next
The Monetary Policy Committee will announce its official decision and policy stance on October 7, followed by commercial banks deciding whether to adjust their lending and deposit rates accordingly.
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