RBI Hikes the Key Policy Rates

Current Context: The Central bank (RBI), held a surprise meeting of the Monetary Policy Committee and brought about key changes in 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%