RBI may increase repo rate by 0.50% in June, inflation forecast will also change: Report

Reserve Bank of India (RBI) may increase the policy rate repo by 0.50 percent.

Reserve Bank of India (RBI) may increase the policy rate repo by 0.50 percent. Economists of Britain’s brokerage company Barclays have said this. He also says that the central bank may revise the inflation forecast from 6.2 to 6.5 percent.

reserve Bank of India (RBI) Inflation has reached beyond satisfactory range (Inflation) Keeping in view the key policy rate in the monetary policy review in June to maintain economic stability in the medium term repo rate (Repo Rate) may increase by 0.50 percent. Economists of Britain’s brokerage company Barclays have said this. He also says that the central bank (Central Bank) May revise the inflation estimate to 6.2 to 6.5 per cent. This is more than the inflation upper limit prescribed by the Reserve Bank. The Reserve Bank has been entrusted with the responsibility of keeping retail inflation between two and six per cent.

Regarding economic growth, economists said that the RBI may reduce the GDP (Gross Domestic Product) growth estimate for 2022-23 to seven percent. Whereas, in the past it was expected to be 7.2 percent.

was increased in May

Barclays Chief Economist Rahul Bajoria said he expects the RBI to make another big hike in the policy rate in June. This is because of the risk to economic stability due to inflation exceeding the set target. Repo rate can be increased by 0.50 percent. On May 4, the central bank suddenly increased the policy rate by 0.40 percent. RBI Governor Shaktikanta Das has already said that there is nothing much to think about in another hike in the policy rate in the monetary policy review in June.

Bajoria said the main challenge for the RBI is to balance the risk of slowing growth with inflation going up. He said the central bank has indicated that inflation management is a key objective of monetary policy. In such a situation, he believes that the RBI can increase the repo rate by 0.50 percent to 4.90 percent in June.

According to Barclays, the possibility of withdrawing more cash from banks cannot be ruled out. In such a situation, there is a possibility of increasing the cash reserve ratio by 0.50 percent to bring it to the level of five percent.

On May 4, the RBI had increased the CRR (cash reserve ratio) by 0.50 percent. Under this, banks have to keep a part of the deposits with the Reserve Bank.

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