Inflation will haunt you now – Tezzbuzz

Advertisement Worldwide inflation is at record levels. Indian economy is also battling high inflation and it is necessary to bring it under control. The Reserve Bank of India (RBI) has increased the repo rate by half a percentage point to control the uncontrollable inflation. RBI on Friday increased the policy rate repo by 0.5 per
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Inflation will haunt you now – Tezzbuzz

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Worldwide inflation is at record levels. Indian economy is also battling high inflation and it is necessary to bring it under control. The Reserve Bank of India (RBI) has increased the repo rate by half a percentage point to control the uncontrollable inflation. RBI on Friday increased the policy rate repo by 0.5 per cent to 5.4 per cent. This is the third hike since the beginning of the current financial year.

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Repo rate is the rate at which RBI lends money to banks. The Reserve Bank had started increasing the repo rate from May this year. In the month of May, the repo rate was increased by 0.40, after that the repo rate was increased by 0.50. Earlier, the repo rate remained at just 4 per cent for almost two years. The inflation data that came out on May 12 had confirmed the rapid rise in inflation.

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June was the sixth consecutive month when retail inflation exceeded the Reserve Bank’s limit. Due to the increase in the repo rate of the Reserve Bank, banks increase the interest rate on all types of loans including home loans, auto loans. RBI changed the repo rate for the first time in nearly two years in May. For two years the repo rate remained at just four per cent.

Now the repo rate has increased to 5.40 percent. However, this increase in interest rates remained as expected. Economists had estimated that the repo rate could be increased by 0.35 to 0.50 percent in the meeting of the Monetary Committee. Reserve Bank Governor Shaktikanta Das said that relief from inflation is not expected soon. However, the price of edible oil will continue to fall further.

Though he said urban demand has picked up, a better monsoon is expected to boost rural demand. There has been no change in real GDP growth. GDP growth for FY2023 remains at 7.2 per cent. In fact, the biggest challenge for the Reserve Bank is to keep inflation under control. The government has also taken several steps to check inflation. The government has reduced the duty on petrol and diesel. Duty on some edible oils has also been reduced.

Ban on export of wheat. The maximum limit on the export of sugar was fixed. After this, gradually inflation started coming under control, but due to the geo-political situation and rising commodity prices in the global market, inflation is not being controlled. Inflation became an important factor in today’s decision of the Reserve Bank, while the figures for July are yet to come, that is, inflation will continue to haunt.

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