June 8, 2022: The Reserve Bank of India (RBI) on Wednesday announced a hike in the repo rate by 50 basis points to 4.90 per cent. This means the EMIs on loans will get more expensive for existing as well as new borrowers.

Today’s hike has come within 36 days of the last repo rate hike of 40 bps to 4.4 per cent done on May 4, 2022 to tame rising inflation. It was the first rate hike since August 2018.

While the inflation rate has been projected at 6.7 per cent for the financial year 2022-23, the RBI remains hopeful that the economy will grow at 7.2 per cent in the current fiscal. The decisions were announced by RBI Governor Shaktikanta Das after three-day deliberations of the Monetary Policy Committee (MPC).

Repo rate is the rate at which the central bank of a country (RBI) lends money to commercial banks in the event of any shortfall of funds. Repo rate is also used by the RBI to control inflation.