RBI will increase repo rate faster this year, will slow down next year

Inflation this year is at its peak compared to the last few decades. Soon people may get another setback. After the recently increased repo rate by RBI, the burden of EMI on the people has also increased. At present, people are not going to get rid of it so soon, because RBI is in the mood to increase the repo rate several times this year.

RBI is in the mood to increase the repo rate several times this year. Yes, according to the Reuters poll, the repo rate will be increased several times by the RBI this year. Economists say that by next year 2023, the repo rate can even cross the level of 6 percent.

The meeting of the monetary policy committee of RBI is starting from June 6 next week, whose decisions will come out on June 8. During this time the repo rate may increase once again. 

Miguel Chanco, Chief Economist (Asia) of Pantheon Macroeconomics said that the hike in the repo rate started this month, which may continue till April. The GDP figures are also indicating an increase in the repo rate. The NSO (National Statistical Organisation) has projected a growth rate of 8.7 per cent in the financial year 2021-22, which is much higher than the estimate. In such a situation, RBI can increase the repo rate to control inflation.

14 economists said the higher repo rate could reach 6 per cent. However, other economists believe that the repo rate can be between 5.15 percent and 6.5 percent. One third of the surveyed economists have projected the repo rate to reach the highest level by the second quarter of 2023, while 6 economists believe that it may take time till the first half of 2023. At the same time, only 4 economists believe that it will reach this level by 2024.