![\"RBI](\"https:\/\/static.toiimg.com\/thumb\/msid-134757335,imgsize-104998,width-400,height-225,resizemode-4\/rbi-governor-sanjay-malhotra-announces-raising-repo-rates-by-25-basis-points.jpg\" "\\"RBI")
<\/div>\n<\/div>\n<\/div>\nMUMBAI: The RBI raised the repo rate by a widely expected 25 basis points to 5.50% on Wednesday as stronger-than-expected growth and broader price pressures prompted the Monetary Policy Committee to unanimously vote for a hike and shift its stance from neutral to calibrated tightening.The move will raise the EMI on a Rs 1 crore loan over 15 years by around Rs 1,500 a month, or about Rs 1,471 at a base rate of 8.50%. If the EMI remains unchanged, the higher rate could extend the loan by about 5.5 to 5.9 months, equivalent to six additional instalments. The rate hike is good news for savers and retired individuals living on fixed income. Bajaj Finance has been the first to announce a 15 to 40 bps increase in fixed deposit rates following the RBI decision.The RBI raised its FY27 real GDP growth forecast by 40 basis points from the August review to 7.1%, driven largely by a sharp revision in Q2 growth to 7.2% from 6.4%. The Q3 forecast was also raised while the Q4 projection was unchanged.Follow live updates here: <\/span>RBI governor Sanjay Malhotra announces 25 bps repo rate hike<\/a>The FY27 inflation forecast was raised by 20 basis points to 5.2%. All quarterly forecasts provided for comparison were revised higher, with the largest increase being the 30-basis-point rise in the Q1 FY28 forecast to 5.6%, while the core inflation forecast was raised to 4.4%.RBI governor Sanjay Malhotra said that strong capacity utilisation, healthy bank credit growth and the central government’s continued capital expenditure and infrastructure push were supporting investment. Double-digit growth in merchandise exports, buoyant services trade and bilateral trade agreements were also supporting aggregate demand.CPI inflation rose to 4.8% in Aug from 4.5% in July. Malhotra said price increases had broadened beyond volatile items, with food inflation becoming more widespread, including increases in sugar and onion.<\/p>\n RBI hikes repo rate for first time since February 2023<\/p>\n<\/div>\n<\/div>\n He said the change in stance meant rate cuts were no longer the likely next move. “Given the current conditions, rate cuts are off the table in the near term and policy action ahead can only be a rate hike or a pause, depending on the evolving conditions and the outlook,\u201d he said.The MPC expects headline CPI inflation to average nearly 5.8% over the subsequent three quarters. Malhotra said the inflation outlook had changed from a year earlier. “In the light of available data, it is clear that inflation and its outlook are not benign as they were last year… In this milieu, recalibrating the policy rate is imperative,” he said.Headline CPI inflation is projected at 5.2% for FY27, peaking at 6.0% in Q3 before easing to 5.7% in Q4 and 5.6% in Q1 FY28.Deficient southwest monsoon rainfall and prevailing El Ni\u00f1o conditions pose risks to agricultural output. Renewed conflict in West Asia has increased crude oil price volatility, keeping energy and other input costs elevated.The indirect pass-through of commodity and energy costs is unfolding alongside upside risks from rapid growth in domestic monetary and credit aggregates.Malhotra said the indicators did not allow the RBI to cleanly separate second-round effects from supply pressures. “It may, however, be kept in mind that it is difficult to distinguish between the second-round effects and the indirect impact of supply side pressures (in production cost through energy and other inputs) as both are present in these indicators,” he said.The RBI also cited tighter global financial conditions, US Federal Reserve rate hikes, high global bond yields and geopolitical instability in West Asia as external risks. It said India’s external sector provided buffers against these pressures through steady capital inflows, remittances, services exports, a recovery in merchandise trade and foreign exchange reserves.<\/div>\n RBI governor Sanjay Malhotra announces raising repo rates by 25 basis points MUMBAI: The RBI raised the repo rate by a widely expected 25 basis points to 5.50% on Wednesday as stronger-than-expected growth and broader price pressures prompted the Monetary Policy Committee to unanimously vote for a hike and shift its stance from neutral to 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governor Sanjay Malhotra announces raising repo rates by 25 basis points MUMBAI: The RBI raised the repo rate by a widely expected 25 basis points to 5.50% on Wednesday as stronger-than-expected growth and broader price pressures prompted the Monetary Policy Committee to unanimously vote for a hike and shift its stance from neutral to […]","magazineBlocksPostCategories":["\u0b26\u0b47\u0b36 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