Owing to high inflation numbers, RBI raised the repo rate by 40 basis points in early May. Since 2001, there have been four rate hike cycles in India during 2005-08, 2010-2011, 2013-14 and 2018-19 of which 2005-08 and 2010-2011 were the serious rate hike cycles. Though inflation is high, rapid monetary policy tightening can hurt the business sentiment and impede nascent economic recovery.
Here is a detailed look at the impact of rate hikes on Indian financial markets, and comparison with US Fed rate hikes is done for better understanding.
COMMENT NOW