RBI MPC: Repo Rate Increased by 35bps to 6.25%

Shaktikanta das

Repo Rate Increase

RBI governor Shaktikanta Das announced MPC decision to hike repo rate by 35 basis point.

With fifth consecutive increase repo rate is at 6.25%. RBI also cut the current FY growth forecast to 6.8%.

The Reserve Bank of India has increased the Rate after inflations continues to be above tolerance level.

Growth Forecast and Inflation

For FY23, central bank maintained Consumer Price Inflation forecast at 6.7%. It is expected that inflation will lower once the winter harvest sets in.

RBI

“Pressure points from high and sticky core inflation and exposure of food inflation to international factors and weather related events do remains.” – Das

RBI governor has said that over the next 12 months inflation is expected to remain higher than 4%.

It is to be noted that the inflation targeting law mandates the RBI to maintain inflation at 4% with a tolerance band of 2%-6%. RBI governor Shaktikanta Das expects the liquidity conditions to improve going ahead and India to be fastest growing economy.

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