The Reserve Bank of India (RBI) governor announced that key policy rates have been hiked. As per the announcement made, the RBI has hiked the repo rate by 40 bps up to 4.40% from 4% earlier.
The last time the repo rate was cut was in May 2020 and has been kept unchanged since then. The stock markets have crashed by fourteen hundred points.
The hike will come into effect immediately. Further, the Cash Reserve Ratio (CRR) has been hiked by 50 bps which will exert further upward pressure on interest rates.
The Cash Reserve Ratio (CRR) will also be increased to 50 basis points to 4.5 per cent with effect from May 21, which in turn will lead to a withdrawal of Rs 87,000 crore, he said.
The yield on a 10-year benchmark bond spiked 7.4 per cent after the announcement.
The last time such an unscheduled statement was made by Governor Das was during the peak of the first wave of the coronavirus (Covid-19) pandemic in May.
In May, RBI called an unscheduled meeting of the Monetary Policy Committee (MPC) – the rate-setting body – and announced a 40 bps cut in the repo rate.
In March 2020 also – just after a nationwide lockdown was announced to curb the spread of the Covid-19 pandemic – the central bank preponed the policy review meeting ( which was scheduled for April) and announced a 75 bps rate cut.
 governor announced that key policy rates have been hiked. As per the announcement made..){kind=link}