RBI increases repo rate by 50 bps, MSMEs read worrying signs ahead

Mumbai, June 8 (KNN) The Reserve Bank of India (RBI) on Wednesday hiked the lending rate by 50 basis points (bps) to 4.9 per cent owing to the persistent inflation.

Delivering the monetary policy statement, RBI Governor Shaktikanta Das said for financial year 2022-23 the real GDP is seen at 7.2 per cent.

“For Q1 at 16.2%, Q2 at 6.2%, Q3 at 4.1%, and Q4 at 4%. And the inflation projection for the current financial year is seen at 6.7%,” he added.

Das further said the 75 per cent of increase in inflation can be attributed largely to food group.

The second consecutive rise in benchmark rates has left  Micro Small and Medium Enterprises (MSME ) sector  worried.

“While we appreciate RBI’s concern on inflation, but the impact of rising interest rates on MSMEs will be detrimental. If the interest rates hikes are unavoidable, Government may have to think of a subvention scheme for MSMEs to obviate the impact,” said Prashant Patel President of Federation of Indian Micro and Small & Medium Enterprises (FISME).   

RBI also announced that Rupay Credit Cards will be linked to UPI platforms to provide convenience to users and expand the scope of digital payments. (KNN Bureau)