Reserve Bank increased the repo rate by 0.25 percent to 6.5 percent

Tags: Economy/Finance

The Reserve Bank of India (RBI) has increased the policy repo rate by 0.25 percent in the bi-monthly monetary policy review with the aim of bringing inflation under control.

An overview of the news:

• After which the new repo rate has increased to 6.50 percent.

• The Gross Domestic Product (GDP) growth forecast for the current financial year 2022-23 has been increased by RBI from 6.8 percent to 7 percent.

• At the same time, in the next financial year 2023-24, the growth rate in gross domestic product (GDP) has been estimated to be 6.4 percent.

• RBI has estimated retail inflation to be 6.5 per cent in the current financial year and 5.3 per cent in the next financial year.

• In order to bring inflation under control, the repo rate has been increased by 2.50 percent in total six times since May this year.

Repo rate:

• Repo rate is the interest rate at which commercial banks borrow money from the central bank to meet their immediate needs.

• An increase in this means that borrowing from banks and financial institutions will be costlier and the monthly instalment (EMI) of existing loans will increase.