RBI Repo Rate 2023 Hike: What Are the Impacts of RBI Repo Rate Hike?

On 1st February 2023, our Finance Minister, Shrimati Nirmala Sitharaman, will present the Union Budget to the parliament at the Rashtrapati Bhavan. Anticipation is high among the people, who are hoping for significant announcements as per the planned budget for the nation.

At 11 am, the event will commence with a speech by the Finance Minister. Meanwhile, if you want to learn about the RBI Repo Rate Hike, including its history, graph, and chart, this article provides all the necessary details. So, read on to find out more.

RBI Repo Rate 2023 Hike
According to recent reports from the RBI, they intend to raise the Repo rate by approximately 25 basis points following the release of the 2023-24 budget. The RBI’s Repo rate has a significant impact on citizens in a variety of ways, which will be discussed below. As you may already be aware, the RBI is responsible for maintaining the nation’s financial stability.
RBI Repo Rate 2023 Hike
The Repo rate, also known as the short-term lending rate, refers to the interest rate at which banks borrow funds from the Reserve Bank of India (RBI) when they are short on cash. This increase in the Repo rate will consequently affect interest rates for deposits, mortgages, and loans.

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History of RBI Repo Rate

Effective Date Repo Rate %Change
7 Dec 2022 6.25% 0.35%
30 Sep 2022 5.90% 0.5%
5 Aug 2022 5.40% 0.5%
8 June 2022 4.90% 0.5%
May 2022 4.40% 0.4%
09 Oct 2020 4.00% 0.00%
06 Aug 2020 4.00% 0.00%
22 May 2020 4.00% 0.40%
27 Mar 2020 4.40% 0.75%
6 Feb 2020 5.15% 0.25%
07 Aug 2019 5.40% 0.35%
06 Jun 2019 5.75% 0.25%
04 Apr 2019 6.00% 0.25%
07 Feb 2019 6.25% 0.25%
01 Aug 2018 6.50% 0.25%
06 Jun 2018 6.25% 0.25%
02 Aug 2017 6.00% 0.25%
04 Oct 2016 6.25% 0.25%
05 Apr 2016 6.50% 0.25%

Over the past few years, the Repo rate of the Reserve Bank of India has undergone a significant change. We have compiled the data in a tabulated form for your convenience. If you are unaware of these changes, keep reading to learn more.

Usually, the Reserve Bank of India will lower the repo rate if the Central Bank of India wants to put more cash into circulation. With the rise in data, the case would be the other way around.

RBI Repo Rate Chart

RBI Repo Rate 2023 Hike

The following chart displays one year’s worth of data. As we can observe, there has been a consistent monthly increase. The RBI is commonly referred to as the Banker’s bank because it provides financial assistance to other banks. However, this has led to an overall increase in inflation in the country.

In December, we saw a 7 basis point hike in the Repo rate by the MPC. Meanwhile, the reserve repo rate remains unchanged at 3.35%.

Graph of the RBI Repo Rate

RBI Repo Rate 2023 Hike

The graph below will help you understand how the repo rate has increased over the last ten years. We’ve put together the information you need to help you. If you have any questions, you can ask them in the comment section.

What Are the Impacts of RBI Repo Rate Hike?

It should be noted that the Reserve Bank of India has raised the Repo rate four times during the current fiscal year.

  • Other factors, including EMIs, Fixed Deposits, Savings, Consumer Spending, etc., will be impacted.
  • It will have an impact on economic growth as consumers switch to purchasing products and services less frequently, thereby affecting demand.
    As demand declines, growth will also be impacted.
  • This will have a negative effect on our economy.
  • In order to balance their expenses and income, the commoner will have to approach their finances with caution.
  • In addition to the aforementioned factors, RBI is liable for a multitude of other tasks. Its decisions affect the lives of commoners in multiple ways.

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The budget for the financial year 2023-24 in India will be presented soon. It is important, particularly for the youth, to become informed about it and understand the economic situation of the country, as well as the policies that have been developed to promote its improvement.

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