Correct option is A
The correct answer is: (A)190 bps
Explanation:
Between May 2022 and August 2024, the Weighted Average Lending Rate (WALR) on fresh rupee loans in India increased by 190 basis points (bps).
Between May 2022 and August 2024, the Weighted Average Lending Rate (WALR) on fresh rupee loans in India increased by 190 basis points (bps).
This rise is attributed to the 250 basis points hike in the policy repo rate during the same period, which influenced banks to adjust their lending rates accordingly.
Information Booster:
Repo Rate Hike: The Reserve Bank of India (RBI) increased the policy repo rate by 250 bps during this period to manage inflation and stabilize the economy.
Transmission to Lending Rates: Banks adjusted their lending rates in response to the repo rate hikes, leading to an increase in the WALR on fresh loans.
Impact on Borrowers: The rise in WALR indicates a higher cost of borrowing for consumers and businesses, affecting loan affordability and investment decisions.
Policy Objective: The RBI's rate hikes aimed to control inflation and ensure economic stability, with a direct impact on lending rates across the banking sector.
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