Mumbai: RBI‘s rate hikes have effectively reduced both aggregate demand and headline inflation by 160 basis points (bps) each as of the second quarter of FY25.
A study published by RBI said that the drop in inflation reflects the impact of a series of interest rate hikes initiated in May 2022, when the central bank began tightening monetary policy to address inflationary pressures exacerbated by geopolitical tensions and global supply chain disruptions.
