RBI decision will end our savings..!? Be careful people..!!

Sowmiya Sriram
RBI decision will end our savings..!? Be careful people..!!

As the world countries are reaching a bad economic situation, the increase in crude oil prices and the increase in the number of corona infections in china have made the lockdown announcement even worse. Although many parties say that the british economy has entered a recession, the official announcement has not been released yet. Similarly, many people have predicted that America and europe will inevitably enter a recession in the next 6-9 months. As a result of this, the first phase of the impact has developed in India. RBI's decision to deal with this will hit the middle class hard.
Retail inflation in september rose to 7.41 percent, a 5-month high. The country's retail inflation has remained above the RBI's upper bound target of 6 percent for the last 9 months. RBI has failed to control inflation despite raising the repo rate by around 1.90 percent in the last 5 months. Also, food inflation rose to 8.6 percent in september, with prices of other commodities rising as prices of industrial, mining, electricity, and fuel rose.
An important weapon at the RBI's disposal to deal with this situation is the monetary policy meeting in December. HSBC predicts that RBI governor Shaktikanta Das will raise the repo rate by 50 basis points to control the country's inflation and announce the repo rate at 6.4 percent in this meeting. The last chance for the RBI is this festive period, during october and November, the country's trade, production, and prices will improve and the country's inflation will improve. Lower rates can avoid raising interest rates.
Although interest rate hikes can control inflation, the growth prospects of the country will be reduced. This is what is currently happening in all the countries of the world, from America to Australia, there has been a slowdown in economic growth due to the increase in interest rates. If the country's economy does not improve during october and November, then RBI governor Shaktikanta Das will increase the repo rate by 50 basis points as predicted by HSBC in the monetary policy meeting in December.
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