Repo rate hiked by 50 basis points to 4.90%

The rate hike does not come as a surprise as the increase was highly anticipated. A total of 17 of the 41 economists who participated in a Bloomberg poll expect the MPC to announce a rate hike of 50 basis points. 

The Reserve Bank of India on Wednesday increased the repo rate and the reverse repo rate to and , respectively. The current repo rate is 4.40% after the rates were increased by 40 basis points at an off-cycle meeting of the Monetary Policy Committee. The standing deposit facility rate is 4.15% and the fixed reverse repo rate is 3.35%. Also Read: Sensex opens in green with 238.17 points; Nifty up by 58.60 pointsThe rate hike does not come as a surprise as the increase was highly anticipated. A total of 17 of the 41 economists who participated in a Bloomberg poll expect the MPC to announce a rate hike of 50 basis points – one basis point is one-hundredth of a percentage point – while another 11 expect an increase of 40 basis points.The last hike in the repo rate and the reverse repo rates are already reflected in loans and mortgages. HDFC, the country’s largest home loan company has increased its retail prime lending rate, on which adjustable-rate home loans are benchmarked, by 35 basis points (including by 5 basis points on Tuesday). ICICI Bank has raised the marginal cost of fund-based lending rate or MCLR (the minimum rate at which they can issue loans) by 30 basis points.

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