The weighted average lending rate (WALR) on fresh rupee loans rose by how many basis points (bps) from May 2022 to August 2024, in India?

The correct answer is 190 bps.

Key Points

• The weighted average lending rate (WALR) on fresh rupee loans in India increased by 190 basis points from May 2022 to August 2024.
• The WALR is a critical measure used by the Reserve Bank of India (RBI) to gauge the average interest rate charged by banks on new loans.
• This increase reflects the tightening of monetary policy by the RBI to combat inflationary pressures in the Indian economy.
• The rise in WALR can impact borrowing costs for businesses and individuals, potentially affecting economic growth and investment.

Additional Information

• Basis Points (bps)
  • One basis point is equal to 0.01% or 1/100th of a percentage point.
  • It is commonly used in finance to describe changes in interest rates or other financial percentages.
• Monetary Policy
  • Monetary policy refers to the actions taken by a country's central bank to manage the money supply and interest rates.
  • The primary goal is to control inflation, manage employment levels, and maintain financial stability.
• Reserve Bank of India (RBI)
  • The RBI is India's central bank, responsible for regulating the country's monetary policy and financial system.
  • It was established on April 1, 1935, and its functions include issuing currency, managing foreign exchange, and supervising financial institutions.
• Inflation
  • Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
  • Central banks, like the RBI, use monetary policy tools to control inflation and ensure economic stability.