The RBI Governor discusses the factors determining the duration and extent of interest rate hikes, following the first rate increase in nearly four years.
Reserve Bank of India (RBI) Governor Sanjay Malhotra has stated that the length and magnitude of future interest rate hikes will be contingent upon actual economic growth and inflation trends. This assertion comes after the RBI raised the repo rate by 25 basis points to 5.5 per cent in its latest monetary policy meeting, marking the first increase since 2018.
The Governor also highlighted that inflationary pressures are expanding, with 37 per cent of commodities within the Consumer Price Index (CPI) basket experiencing inflation above 4 per cent in August, as compared to 20 per cent in March. The RBI has forecasted GDP growth at 7.1 per cent and retail inflation at 5.2 per cent for the fiscal year 2026-27, with inflation expected to reach six per cent during the October-December quarter.
Source:
Akashvani News
