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RBI to hike Repo Rate to 5.9% by Dec-end

Published on June 15, 2022
Current Context: Fitch Ratings expects RBI to raise the policy repo rate further to 5.9% by December 2022 due to a deteriorating inflation outlook.
RBI to hike Repo Rate to 5.9% by Dec-end
  • Fitch expects the repo rate to rise further to 6.15% by the end of 2023 compares to the forecast of 5%.
  • According to them, the Indian economy faces drawbacks such as a worsening external environment, elevated commodity prices, and tighter global monetary policy.
  • Fitch expects growth to likely improve in April - June quarter on a rebound in consumption as COVID-19 cases subsided towards end-March.
  • Compared to the last two monetary policies, RBI has hiked the interest rate by 90 basis points. Now, the repo rate stands at 4.9%.
  • By looking at statistics, Fitch lowered its Indian economy forecast to 7.8% in 2022-2023 compared to its previous estimate of 8.5%.
  • Apart from that Fitch upgraded India's sovereign rating to 'stable' from 'negative' after two years.

Question:

Q.1 As per the Fitch Report what will be the expected repo rate by the end of 2023?
a. 7.21%
b. 6.23%
c. 6.15%
d. 5.5%
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