- As a part of that RBI hiked the repo rate by 40 basis points to 4.4%, and is expected to increase the key lending rates again in the June meeting.
- Both fiscal and monetary authorities are brainstorming to control inflation which has already stayed above the central bank's mandated target band of 2-6%.
- Apart from that RBI along with the repo rate they have also raised the cash reserve ratio (CRR) by 50 basis points to 4.5% to observe the excess liquidity in the banking system.
- It has been huge pressure on both the central government and RBI as the retail inflation already touched the sky-high i.e eight-year high in April.
- RBI considers the reason behind the eight-year high retail inflation was due to the fiscal steps taken by the government like tax cuts, subsidies, etc.
Question:
Q.1 RBI has to increase Repo Rate by how many basis points?a. 51 basis points
b. 40 basis points
c. 32 basis points
d. 20 basis points
