In its latest monetary policy meeting, the Reserve Bank of India (RBI) announced a 25 basis points hike in the repo rate, bringing it to 6.75%. This marks the second rate hike in three months, reflecting the central bank’s focus on controlling inflation, which remains above its target of 4%.
The decision comes as global crude oil prices and food inflation put upward pressure on costs. The RBI also revised India’s GDP growth forecast for FY25 to 6.1%, down from 6.3% earlier.
Impact:
Higher borrowing costs will affect businesses dependent on loans, as well as consumers, whose home and vehicle loan EMIs will rise. Sectors like real estate, automotive, and manufacturing are likely to face reduced demand. However, savers may benefit from better returns on fixed deposits and bonds.
BottBridge’s View:
While this poses challenges, businesses can mitigate the impact by optimizing cash flow and renegotiating loan terms. BottBridge specializes in financial planning and liquidity management, helping businesses navigate uncertain economic conditions. Our team can also advise on alternative funding options, ensuring businesses remain resilient.
