RBI may hike repo rate by 25 bps as inflation and oil risks mount: Sunil Sanghai

The Reserve Bank of India (RBI) is considering a 25 basis point increase in the repo rate in October. This decision comes as inflation and rising oil prices pose significant risks to the economy. The RBI is also under pressure from a narrowing interest rate gap with the US, which is affecting the value of the rupee. A higher repo rate would make borrowing more expensive and could help slow down economic growth, but it may also strengthen the rupee in the long run.

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The RBI may raise interest rates to combat inflation and oil price risks. This could lead to higher borrowing costs and reduced demand for bonds.

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