RBI may raise repo rate by 35 basis points in upcoming policy meet: Report
New Delhi [India], July 29 (ANI): In line with the global trend of monetary policy tightening to cool off inflation, the Reserve Bank of India (RBI) in its upcoming monetary policy meeting is expected to hike the repo rate by 35 basis points, said global information service provider S&P Global Market Intelligence.
ANI
Jul 29, 2022 13:16 IST
New Delhi [India], July 29 (ANI): In line with the global trend of monetary policy tightening to cool off inflation, the Reserve Bank of India (RBI) in its upcoming monetary policy meeting is expected to hike the repo rate by 35 basis points, said global information service provider S&P Global Market Intelligence.
The next monetary policy committee (MPC) meeting is scheduled during August 3-5, 2022. So far, the RBI has hiked the key interest rates by 90 basis points in tranches to 4.90 per cent.
India's retail inflation has been over the Reserve Bank of India's upper tolerance band of 6 per cent for the sixth consecutive month in a row in June. Retail inflation came in at 7.01 per cent in June.
On the other hand, India's Wholesale Price Index (WPI) based inflation has been in the double-digit for 15 months in a row now.
Inflation has persisted due to the rise in prices of crude oil and other essential commodities owing to disruption in the global supply chain caused by the Russia-Ukraine conflict.
In the US, inflation came in at 9.1 per cent in June, the highest since the early 1980s. Inflation approaching double-digits has prompted the US central bank to tighten its monetary policy.
"After last weeks' Fed 75-basis point hike, U.S. markets will be eagerly awaiting non-farm payroll numbers, which will help guide the future path of the Fed. The market is currently expecting a slowing in the pace of job gains with the latest figure expected to come in around the 260k mark (down from 372k)," said S&P Global Market Intelligence.
In the backdrop of high inflation, the US Federal Open Market Committee earlier this week raised its key policy interest rate by 75 basis points to 2.25-2.50 per cent, anticipating that the increase in the interest rates will be "appropriate". Hiking interest rates typically cool demand in the economy, thereby putting a brake on the inflation rate.
Besides, US Gross Domestic Product contracted by 0.9 per cent in the second quarter of this year after a first-quarter drop of 1.6 per cent, the US Commerce Department said on Thursday in a preliminary estimate that technically placed the economy in a possible recession. (ANI)
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