HomeEconomy NewsExperts decode how interest rate hike will impact trade sector

Experts decode how interest rate hike will impact trade sector

In a surprising move, the Reserve Bank of India (RBI) hiked interest rate by 40 basis points taking the repo rate to 4.4 percent. RBI governor Shaktikanta Das attributed the rate hike decision to geopolitical challenges and rising inflationary pressures. The RBI's rate hike comes at a time when India’s trade deficit widened to over USD 20 billion in April, rising by 31 percent over last year. While exports jumped by over 24 percent, imports were up by over 26 percent.

By Parikshit Luthra  May 4, 2022, 8:08:36 PM IST (Published)

What was being anticipated for very long has finally happened - in a surprising move, the Reserve Bank of India (RBI) hiked interest rate by 40 basis points taking the repo rate to 4.4 percent.


RBI governor Shaktikanta Das attributed the rate hike decision to geopolitical challenges and rising inflationary pressures.

He said recent GDP releases suggest that the global economic recovery is losing pace and global growth projections are being revised downwards for 2023. He however added that India’s external sector has remained resilient amidst formidable global headwinds.

The RBI's rate hike comes at a time when India’s trade deficit widened to over USD 20 billion in April, rising by 31 percent over last year. While exports jumped by over 24 percent, imports were up by over 26 percent.

To discuss how RBI's decision will impact India’s trade sector, CNBC-TV18 spoke to Aditi Nayar, Chief Economist at ICRA; Mahesh Desai, Chairman of EEPC India and Ajay Sahai, Director General & CEO at FIEO.

Watch video for more.