RBI’s interest rate hike evokes criticism
RBI’s decision to increase the repo and reverse repo rate by a steep 50 percentage points has evoked strong criticism. The spokesperson of the main opposition party BJP says, “Repo Rate hike by 50 bps will prove counter-productive. Instead of taming inflation these hikes will further trigger it. In the last 15 months the government has addressed the issue of inflation by raising Repo and Reverse Repo Rates 11 times, which has taken the rates from 5 to 8 per cent,”
Across the Atlantic, “The Wall Street Journal” commented that the rate hike in India has weighed heavily on the share market. Many feel that the rate hike would increase the material cost by over 40%, the raise would be counter productive instead and would rise the inflation rather than curbing it. The banking industry feels that the end customer would suffer as an increase in EMI means more default.
(From our Raindrops Promoter’s News Desk)