RBI is Mulling to Increase Repo Rate in June 2022

The spike in the March retail inflation to 6.95 per cent followed by the jump in bond yields has ignited a debate on the extent and timing of RBI’s repo rate hike — which will make home and auto as well as corporate and MSME loans costlier.

The pundits are expecting an increase in the repo rate from anywhere between 75 basis points this fiscal and 200 basis points over a longer period, stretching well into the next financial year.

According to media reports, SBI group chief economic adviser Soumya Kanti Ghosh said the RBI would raise the rates by 25 basis points each in June and August.

On the other hand, Sonal Varma, MD and chief economist for India at Nomura, projected the repo rate will be increased up to 200 basis points through 2023.