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RBI hints at an Increase in Policy Rates in the Next MPC Meeting

Published on May 23, 2022
Current Context: RBI Governor Shaktikanta Das has said that they were looking for rate hikes in the upcoming few meetings and they will also come up with a new inflation rate.
RBI hints at an Increase in Policy Rates in the Next MPC Meeting
  • 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
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