Key interest rates have increased
The Reserve Bank of India (RBI) has decided to raise the key interest rate by a quarter to a quarterly monetary policy committee (MPC) meeting. The second bilateral policy meeting of the current financial year took place three days from June 4. The decisions taken at this meeting were announced today. The MPC Committee unanimously approved increase of key interest rates.
The repo rate now stands at 6.25 per cent. The reverse repo rate was increased from 5.75 percent to 6 percent. Inflationary fears and rising international oil prices have been attributable to the hike in rates. This is the first time in four years that RBI has raised interest rates. Last year, the repo rate was increased by 8 percent. Thereafter, the rates are coming down or keeping it aside.
RBI estimates that the Consumer Price Index (CPI) based inflation is 4.8 per cent of 4.9 per cent in the year 2018-19 and 4.7 per cent in the second half. As per the previous review, the RBI has estimated the growth of 7.4 per cent in the current fiscal. The next review will be held on July 1,