RBI stays hawkish in fight against inflation; MPC reverses Covid-era cuts

RBI hikes repo rate by 50 bps, keeps FY23 inflation, growth forecasts at 6.7% & 7.2%; home loan rates set to exceed 8%

The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday hiked the policy repo rate by 50 basis points to 5.4 per cent — a three-year high —owing to inflation concern and to shield the exchange rate, which has come under pressure since war broke out in Europe in February.

The home loan rates of some major lenders like State Bank of India will cross 8 per cent with this repo rate hike. The home loan rate linked to the external benchmark or the repo rate is 7.55 per cent for many lenders now.

While