Rate hikes: RBI vs Other Central banks

Question 1

What is the difference between Repo rate hikes implemented by the RBI versus other major central banks?

Answer 1

The RBI has raised rates more gradually than central banks like the US Federal Reserve, the European Central Bank, and the Bank of England.
This reflects the RBI’s aim for a “soft landing” in contrast to a more severe economic slowdown or “hard landing.”

Question 2

Define the term “soft landing” in an economic context.

Answer 2

A soft landing refers to a controlled and gradual economic slowdown.
Central banks may try to achieve a soft landing by raising interest rates more slowly to curb inflation without causing a sharp recession.

Question 3

Define the term “hard landing” in an economic context.

Answer 3

A hard landing refers to an abrupt, painful economic downturn or recession.
This can be caused by factors like overly aggressive interest rate hikes.