New Delhi: India’s central bank on Wednesday raised its key interest rate to 4.9% from 4.4%, the second such hike in the last three weeks to contain inflation.
The Reserve Bank of India on Wednesday increased the repo rate by 50 basis points to 4.90%. The current repo rate is 4.40% after the rates were increased by 40 basis points at an off-cycle meeting of the Monetary Policy Committee.
The central bank forecasts 6.7 percent inflation, while the real GDP growth rate is pegged at 7.2 percent.
The Reserve Bank of India (RBI) Governor today announced that the Monetary Policy Committee voted unanimously to hike the benchmark interest rate by 50 bps with immediate effect.
The RBI also revised the inflation projection for FY23 to 6.7 percent from 5.7 percent earlier. Stating on inflation Das said, Inflation likely to remain above 6 percent in first three-quarters of current fiscal. Our steps will be calibrated, focussed on bringing down inflation to target level,” the Governor said. The RBI also left its FY23 GDP growth forecast unchanged at 7.2%.
RBI Governor Shaktikanta Das has said that the Standing Deposit Facility and Marginal Standing Facility rates also raised by 50 basis points. Standing Deposit Facility rate is now 4.65 per cent, while Marginal Standing Facility rate is at 5.15 percent.
The RBI Governor said that the Russia-Ukraine war has led to globalisation of inflation. He said that the Inflation has steeply increased much beyond the tolerance level. The process of recovery in emerging market economies is also getting affected. But the Indian economy has remained resilient.
Inflation projection for April-June has been revised to 7.5 percent from 6.3 percent, for July-September it has been revised to 7.4 percent from 5.8 percent.
Inflation projection for October-December has been revised to 6.2 percent from 5.4 percent, while for January-March 2023 it has been updated to 5.8 percent from 5.1 percent. said, Shaktikanta Das.
A gradual withdrawal of the extraordinary accommodation has been started.
RBI will continue to be proactive and decisive in mitigating the fallout of the geopolitical crises on our economy. The steps will be measured, calibrated, Mr Das said.