Stock Market Plunges After RBI Hikes Interest Rates

In a surprising move by the Reserve Bank of India (RBI), the benchmark interest rates have been hiked by 40 basis points (bps) to 4.4%. In an unscheduled press conference today, RBI Governor Shaktikanta Das announced this.

He stated that the rates were raised in response to India’s rising inflation rate. Furthermore, he stated that the Monetary Policy Committee (MPC) unanimously voted to raise policy repo rates by 40 basis points (bps) with immediate effect.

Due to the interest rate hike, EMIs are set to become costlier and would further reduce the consumption power of the middle class.

Mr Das also blamed the increase in interest rates on geopolitical tensions, high crude prices, and commodity scarcity. Due to the rise in interest rates, the stock market reacted negatively and plunged by nearly 1307 points or 2.29%.

Twitter was quick to react to RBI’s hike in interest rate,

 

 

Team NH too does have a meme for the situation:

WhatsApp Image 2022 05 04 at 3.53.10 PM

 

References: India.com

Featured image source: Hindustan Times

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