RBI to Raise Interest Rate by 25 Basis Points on April 6: Economists
The Reserve Bank of India (RBI) is expected to raise its main interest rate by 25 basis points on April 6, according to a Reuters poll of economists. The move is in response to rising inflation and concerns over the economic impact of the COVID-19 pandemic.
The RBI’s Monetary Policy Committee is set to meet on April 6 to review its policy stance. The Reuters poll of 50 economists showed that 42 of them expect the RBI to raise the repo rate by 25 basis points to 4.50%. The remaining eight economists predicted no change in the interest rate.
Interest Rates to Remain Steady for the Rest of the Year
After the anticipated rate hike in April, the RBI is expected to pause for the rest of the year, with economists predicting that the interest rate will remain steady at 4.50%. The RBI had kept its repo rate unchanged at 4% for the past five meetings since May 2021, aiming to support the economy amid the pandemic.
Economists believe that the RBI’s decision to raise interest rates is necessary to control inflation, which has been rising due to higher fuel prices and supply chain disruptions caused by the pandemic. However, the move may also slow down the country’s economic growth, which has been recovering gradually.