RBI rate hike: When the repo rate rises, the borrowing cost for banking institutions rises as well, which is passed on to account holders
India’s central bank Reserve Bank of India (RBI) is set to raise interest rates again. After a small jump in May by 40 basis points, RBI hiked the interest rate by another 50 basis in its bid to fight inflation in August. According to a Reuters poll, there is a wide consensus that the RBI will raise rates at the September 30 meeting. The repo rate is the rate at which the RBI lends short-term funds to banks.