Monetary Policy: In RBI's monetary policy review meeting today, the repo rate may increase for the fourth time

The three-day meeting of the Reserve Bank of India's (RBI) monetary policy review is starting today. It is expected that the central bank may increase the repo rate by 0.50 percent on 30 September. If this happens, the repo rate will go down to 5.90 percent, from 5.40 percent now. Last week alone, about a dozen central banks raised interest rates. Bank of America had gained 0.75 percent.

To control inflation, central banks around the world have adopted the strategy of raising interest rates. Despite this, inflation rates are above their targets. The rate of retail inflation in India is 7 percent while RBI's target is 2 to 6 percent. It has increased interest rates by 1.40 percent three times since May.

Know what experts say

Keeping in view the recent developments in the foreign exchange market, RBI may also increase the policy rates by 0.50 percent. -Madan Sabnavis, Chief Economist, Bank of Baroda

The repo rate is set to increase by 0.50 percent. Its peak rate will go up to 6.25 percent and the final growth will be 0.35 percent in December. -SBI

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