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RBI may go for 40bps rate hike on June 8

Published on June 07, 2022
Current Context: According to a recent poll Reserve Bank of India (RBI) is likely to raise the repo rate by 40 basis points for the second time.
RBI may go for 40bps rate hike on June 8
  • The Committee held an unscheduled meeting in early May and voted unanimously for a 40 basis point repo rate hike due to an increase in April inflation.
  • In addition to that CPI inflation also surged to a near-eight-year high of 7.79 percent in April which is beyond the 2-6 percent tolerance band.
  • According to the poll it has also been estimated that MPC is likely to increase policy rates ranging from 25 basis points to at least 50 basis points.
  • While the median of economists’ predictions points to a 40-basis-point rate hike on June 8 which equals to 4.80%.

Question:

Q.1 According to a recent poll the RBI is expected to increase the repo rate by ________ basis points.
a. 50 basis points
b. 40 basis points
c. 30 basis points
d. 35 basis points
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