Mutual Cafe

Expectation of rate hike in June 'a no-brainer', says RBI Governor

RBI Governor Shaktikanta Das on Monday hinted at another interest rate hike in early June to bring down stubbornly high inflation rate which has remained above the tolerance level for the past four months.
"Expectation of rate hike, it's a no-brainer. There will be some hike but how much I will not be able to tell now... to say that 5.15 (per cent) may not be very accurate," Das said in an interview with CNBC-TV18.
The next meeting of the Monetary Policy Committee (MPC) is scheduled for June 6-8.
RBI, in its first rate move in two years and its first hike in nearly four years, raised the repo rate by 40 basis points to 4.40 per cent following an off-cycle meeting earlier this month.
In April RBI raised its inflation forecast for the current fiscal year to 5.7 per cent from earlier estimate of 4.5 per cent and lowered its GDP estimate to 7.2 per cent from 7.8 per cent for 2022-23, citing the impact of escalating geopolitical tensions triggered by the Russia-Ukraine war.
Das further said the RBI and government has entered into another phase of coordinated action to cool down inflation.
RBI has taken a number of steps to moderate inflation in the last 2-3 months, he said, adding that the government on other hand has taken measures, including wheat export ban and cut in excise duty on petrol and diesel.
All these put together will have sobering impact on price rise, he added.
Retail inflation has been above RBI's upper tolerance level for the past four months.