The six member monetary policy committee of RBI decided to increase 50bps to 4.9% while raising inflation forecast by 100bps to 6.7% for this fiscal year. This is for wishing that further monetary tightening in the coming months. There will be a increase in the lending rates due to the hike in the repo rate in a month for the second time and this will cause the borrowers to feel the pinch of higher equated monthly instalments. The RBI kept its growth forecast unchanged at 7.2% for the FY23. The repo rate before the pandemic was 5.15%. The Russian invasion of Ukraine forced to focus an inflation.
When there is a hike in the rates it would make the home and vehicle loans costlier. This worried the real estate and companies because it may affect their recovery. Companies says that the RBI's concern for controlling the inflation is well appreciated but it will affect the demand.
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