RBI Hikes Interest Rate After 4.5 Years

Mumbai: Amidst concerns of inflation arising due to increasing international oil prices, the Reserve Bank of India, on Wednesday, hiked key interest rates by 25 basis points to 6.25 per cent. This is the first time in four and half years that the bank has raised the interest rate. The last time the central bank had hiked the rates was in January 2014. Since then, the rates have either reduced or maintained status quo.

The GDP growth rate for the current financial year has been revised and estimated at 6.7 per cent.

“GDP growth for 2017-18 has been revised and estimated at 6.7 per cent backed by an all time high production of food grains and horticulture, strengthening of industrial growth and resilient services sector activity,” said RBI Governor Urjit Patel.

All the six members voted for an increase in the policy rates, prompting the Monetary Policy Committee headed by Governor Urjit Patel to raise the repo rate by 25 basis points. The reverse repo rate has been adjusted to six per cent.

The central bank also revised the upwards retail inflation range to 4.8 to 4.9 per cent in the first half of 2018-19.