Rbi repo rate hike now inflation control is challenge detail here

New Delhi : After almost 4 years, the Central Reserve Bank has increased the repo rate. This increase is of 0.40 percent. With this, the repo rate has come down to 4.40 percent. Although this decision of RBI is to control inflation, but looking at the current situation, everything is not so easy.

How is the situation: If we look at the changing environment after the war between Russia-Ukraine, then food inflation is expected to increase even further. Apart from this, after the ban on export of palm oil by Indonesia, the prices of edible oil in India will increase. This is being said because India has been importing palm oil from Indonesia on a large scale.

Global wheat shortage is affecting domestic prices. However, there is no crisis of any kind on the domestic supply. Despite this, the effect of the global environment is visible. According to Food Secretary Sudhanshu Pandey, the Centre's wheat procurement in the current Rabi marketing year is likely to be half that of 19.50 million tonnes amid high exports of wheat and a possible fall in production. Apart from this jump in fertilizer prices, other costs have had a direct impact on food prices.

What Experts Say: Deloitte India economist Rumki Mazumdar said, “There was a possibility of a hike in the repo rate in June. The sudden move of RBI to increase the repo rate just a month ago shows that it does not want to wait and wait but act. Rather, it is willing to take swift steps to contain inflation before it derails the economic revival.

Pradeep Multani, president of industry body PHD Chamber of Commerce, said the RBI's move is aimed at containing inflationary pressures. But an increase in the repo rate and CRR (cash reserve ratio) will impact consumer and business sentiment. He said the economy was still recovering from the effects of the pandemic. There is also a global crisis from above. In such a situation, the increase in the repo rate will have a huge impact on trade and finance.

Impact on real estate: The decision of the Reserve Bank to hike key policy rates will impact the growth of real estate and may hit the demand for homes. Industry people have expressed this apprehension.

Further hike: Rahul Bajoria, India's chief economist at British brokerage Barclays, said he expects the RBI to hike the repo rate by at least 0.50 per cent in the next meeting to be held in early June and when it touches 5.15 per cent Only after that the central bank will consider giving some relief.