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RBI Hikes the Key Policy Rates

Published on May 05, 2022
Current Context: The Central bank (RBI), held a surprise meeting of the Monetary Policy Committee and brought about key changes in policy rates.
RBI Hikes the Key Policy Rates
  • Looking at the consistently growing inflation, which crossed the 4+/- 2% threshold this quarter at 6.95%, the Reserve Bank of India hiked the key policy rates. The increase is meant to contain inflation in the long term.

 

CRR

Repo

SDF

MSF

Earlier

4.0%

4.0%

      -

   -

Now

4.50%

4.40%

4.15%

4.65%

  • Impact on the Indian Economy
    • Increased rate of interest thus a dip in demand
    • Rise in monthly EMIs
    • Debt investments will become more attractive
    • Consumer Loans are expensive

Question:

Q.1 What is the current CRR for the scheduled commercial Banks, mandated by the RBI?
a. 4%
b. 4.40%
c. 4.54% 
d. 4.50%
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