Effect of rate hikes still unclear: MPC member | The Financial Express

Effect of rate hikes still unclear: MPC member

The central bank raised its key policy repo rate by 50 basis points (bps) in August to 5.40%, taking the total rises since May to 140 bps.

Effect of rate hikes still unclear: MPC member
RBI MPC next policy decision is due on September 30

By Savio Shetty

The success of the Reserve Bank of India’s interest rate rises in controlling inflation is not yet clear, and the pace of rate adjust- ment will depend on the state of the economy, monetary policy committee (MPC) member JR Varma said on Friday.

“If there is robust economic growth, then we would like to accelerate the (inflation) reduction to 4%. But if the economy is struggling, then a slower pace of adjustment would be appropriate,”Varma told the Reuters Trading India forum.

The central bank raised its key policy repo rate by 50 basis points (bps) in August to 5.40%, taking the total rises since May to 140 bps. Its next policy decision is due on Sep- tember 30, with expectations of a rise of less than 50 bps.

By tightening liquidity, the central bank also has pushed interbank interest rates higher within a band, called the corridor, that is defined by the rates at which it borrows or lends from banks.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Photos
11 Photos
‘The festival of democracy’ – Modi votes in Gujarat 2nd phase! See PHOTOS
11 Photos
Gujarat Assembly Election 2022: The Festival of Democracy – In PICS
8 Photos
Mumbai Attack 26/11: Tributes paid to martyrs on 14th anniversary of terror attacks that shook the nation