The Reserve Bank of India raised its key interest rate by 50 basis points on Wednesday, taking the repo rate to 4.9 per cent, and raised its inflation projection for the current fiscal to 6.7 per cent, well above the upper-end of its target range of 2-6 per cent.
The RBI has revised the inflation projection big-time from 5.7% to 6.7% in 2022-23, but retained its earlier GDP forecast of 7.2%. There are now multiple headwinds, which will force the RBI to revise the growth projection in the near future.
Home, auto, and other loans' EMIs will rise after the Reserve Bank of India on Wednesday raised its key interest rate by 50 basis points, the second increase in five weeks.