Sakshi Education
- In the first hike since 2018, the US Federal Reserve increased the interest rates by 25 basis points.
- In February, inflation in the United States reached 7.9%, which is the highest in 40 years. The Russia-Ukraine war has also led to an increase in global commodity prices. Thus, there is upward inflation pressure. Hence, the interest rates have to be increased to reduce the money supply in the market and curb inflation. The US Federal Reserve projected that its policy rate would hit a range between 1.75% and 2% by end of 2022.
- The Reserve Bank of India (RBI) continues to hold an accommodative stance. However, according to the data released by the Ministry of Statistics & Programme Implementation (MoSPI), India’s retail inflation surged to 6.07% in February. In January retail inflation was 6.01%. Thus, this is the second consecutive month that the Consumer Price Index (CPI) data has crossed the Reserve Bank of India’s (RBI) upper threshold of 6%.
- If inflation continues to cross the upper threshold limit, RBI may hike the interest rates.
Published date : 22 Mar 2022 05:58PM
