RBI Hikes Repo Rate By 25 Basis Points To 6.50 Per Cent While the central bank has increased rates, it called the Indian economy resilient
By Paromita Gupta •
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The Reserve Bank of India governor Shaktikanta Das on Wednesday announced that the Monetary Policy Committee (MPC) had decided to increase the repo rate by 25 basis points to 6.50 per cent. The previous change in the kay rate took place in December 2022 when RBI hiked the repo rate by 35 basis points to 6.25 per cent. This was the first monetary policy statement made by RBI for the year 2023.
Repo rate refers to the rate at which banks deposit money with RBI.
"The global economic outlook does not look as grim now as it did a few months ago. Growth prospects in major economies have improved, while inflation is on a descent, though it still remains well above the target in major economies. The situation remains fluid and uncertain…Amidst these volatile global developments, the Indian economy remains resilient. Real GDP growth is estimated at 7.0 per cent in 2022-23, according to the first advance estimate of the National Statistical Office (NSO)," Das added during the presentation.
The MPC is a six-member committee comprising Das, Rajiv Ranjan, Ashima Goyal, Shashanka Bhide, Jayanth Varma, and Michael Patra.
Additionally, the RBI governor shared that the standing deposit facility (SDF) rate was increased to 6.25 per cent from 6.00 per cent, the marginal standing facility (MSF) rate was increased to 6.75 per cent from 6.50 per cent, and the Bank Rate was increased to 6.75 per cent from 6.50 per cent.
"Looking ahead, while inflation is expected to moderate in 2023-24, it is likely to rule above the 4 per cent target," added Das while talking about India's economic future.
