The RBI Governor discusses factors influencing future interest rate hikes, as well as current inflationary pressures.
India's Reserve Bank of India (RBI) Governor Sanjay Malhotra has indicated that the duration and extent of any potential interest rate hike cycle will be contingent on actual economic growth and inflation trends. The revelation follows the RBI's decision to raise the repo rate by 25 basis points to 5.5 per cent during a Monetary Policy Committee (MPC) meeting held from October 5-7, marking the first increase in nearly four years.
In the minutes of this meeting, all six members unanimously supported the rate hike. The Governor also highlighted the broadening inflationary pressures, with 37 per cent of commodities within the Consumer Price Index (CPI) basket recording inflation above four per cent in August – a significant increase from 20 per cent observed in March.
The RBI has projected GDP growth at 7.1 per cent and retail inflation at 5.2 per cent for the fiscal year 2026-27. The Governor further expects inflation to reach six per cent during the October-December quarter.
Source:
Akashvani News
