The meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is going to start today. In this meeting, the central bank will take policy decisions, which will be announced by RBI Governor Shaktikanta Das on August 5. It is being said that in this meeting to be held between August 3 and 5, RBI can increase the repo rate. In the meeting of the Monetary Policy Committee held earlier also, the RBI increased the repo rate. The meeting of the Monetary Policy Committee, which is held every two months, is starting today.

How much can the repo rate increase

According to experts, the Reserve Bank can increase the rate by 0.25 to 0.35 percent. The inflation rate has been above the target set by the central bank for several consecutive months. To overcome this, a decision on increasing the repo rate can be taken in the meeting of the Monetary Policy Committee.

Last time there was so much increase

Retail inflation has remained consistently above 7 percent. If the central bank raises the repo rate, then banks can increase the interest rate on the loan. The Reserve Bank had increased by 0.40 percent in May and 0.50 percent in June. After the continuous increase, the repo rate has gone up to 4.90 percent.

Inflation rate

Inflation stood at 7.01 percent in June. This was the sixth time in a row that the inflation rate was above the target limit set by the Reserve Bank (RBI). The figures for the month of July are yet to come. In May, the retail inflation rate was 7.04 percent. Retail inflation was recorded at 7.79 percent in the month of April. Food inflation stood at 7.75 percent in June, as against 7.97 percent in May.

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more than the Reserve Bank’s estimate

The Reserve Bank has raised its inflation forecast for 2022-23 from 5.7 percent to 6.7 percent. The government has ordered the RBI to keep retail inflation at 4 percent to 4 percent with a margin of 2 percent. RBI had set a target of 6 percent retail inflation.

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