The Reserve Bank of India (RBI) has lent another blow by increasing the Repo Rate by 25 basis points (bps).
This will lead to further increase the interest rate which, in turn, will accentuate the industrial slump, more markedly in certain loan-dependent sectors like realty and automobile.
RBI traditionally likes to surprise, particularly with the timing of its rate changes, and the latest move is no exception. I thought it would tighten its policy this month, and it will perhaps link it with a particular growth or inflation release. But the hike in the Repo Rate has taken the market by a bit of surprise as it was anticipating an increase in the cash reserve ratio (CRR).
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1 comment:
you are right, the last thing the world needs now is rate hikes, world markets are tumbling
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