EXPLAINED RBI Hike and Impact

RBI has hiked repo rate by 50 basis points

Find out why

What has happened?

Repo rate hiked by 0.5%

The new Repo Rate is now 4.90%

Total hike has been 0.90% in last 5 weeks

Why has this happened?

RBI expects inflation to stay above 6%

To cut rising inflation, repo rate needs to be hiked

The hike is expected to cut money supply

Consequences

EMIs across banks will rise

Inflation is expected to go down in next few quarters

Consumption in the market could decline

How is the inflation scenario?

Inflation went above 10% briefly this year

RBI maintains 7.2% target for 2022-23

Global price rises have affected Indian inflation

Savings Accounts Interest rates are expected to rise

Here are the best banks for savings accounts in India in 2022