Inflation prevailing in the Indian market has hampered the growth of the economy to a considerable extent. The Reserve Bank of India is trying its level best to tame it but till now all such attempts have been proved to be futile. RBI tried to restrain it through various measures but almost all the times inflation emerged as victorious.
In order to trick inflation and to rein it, RBI has been hiking its policy rates consistently due to which the lending rates offered by the banks to the customers have gone real high but in this condition the Central Bank is left with very limited options.
RBI has been very cautious in hiking the policy rates and has been hiking the rates in a systematic manner; but now RBI is expected to hike the policy rates by 50 points at once in the monetary policy review scheduled for May 3.
The chief economist at HDFC Bank Mr. Abheek Barua said "They have to move by about half a %age point in the May policy just to signal to the market that they are trying to catch up to the curve."
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