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RBI has increased the policy repo rate by 0.50 percent this month. Earlier on May 4, the repo rate was increased by 0.40 percent. Now the repo rate has reached 4.90 percent.
The Reserve Bank (RBI) has dismissed the allegations of delay in the steps to be taken to control inflation.RBI) has outrightly rejected by the Governor. In a program, Governor Shaktikanta Das said that the Reserve Bank has taken the right step at the right time regarding the policy and inflation (inflationThere has been no delay in measures to keep ) under control. In fact, the Reserve Bank started raising rates in May between two policy reviews, although major central banks around the world had already started increasing rates before that. After which there were allegations that the Reserve Bank has delayed in taking steps. After increasing the repo rates by 0.4 percent in May, only a month later, the Reserve Bank has increased the repo rates by half a percentage point. In the program, the Governor made it clear that RBI has not been behind in taking decisions, we have moved ahead according to the need of the hour.
First, raising rates would have a bad effect
The governor said that if we had tightened the policies ahead of time, it would have been disastrous for the entire economy. According to him, even after keeping the policy soft, there was a decline in the economy in 2021-22. In such a situation, it became necessary to bear the burden of high inflation during the impact of the epidemic. Whose recovery is not burdened. The Governor of the Reserve Bank also made it clear that we stand by our decision. According to him, the Reserve Bank was taking decisions according to the measures necessary for economic development. For this reason, policies were simplified amid the impact of the epidemic, although economic growth was badly affected during the epidemic. According to him, if the policies were tightened during this period, then how much damage could have been done to the economy. For this reason, even in the beginning of 2022, a strict stance was not taken regarding the policies. He informed that in the month of March, the Reserve Bank got a signal that the economy had recovered from the effect of Corona, so only after March, attention was started on controlling inflation.
RBI hikes repo rates twice
At present, the Reserve Bank has put its full attention on inflation. And repo rates have been increased twice in two consecutive months. RBI has increased the policy repo rate by 0.50 percent this month. Earlier on May 4, the repo rate was increased by 0.40 percent. Now the repo rate has reached 4.90 percent. The Reserve Bank has indicated that the rate hike will continue in the coming times as well. An increase in repo rates reduces liquidity in the system and reducing non-essential demand increases the chances of prices coming down.
Source: www.tv9hindi.com
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