The Reserve Bank of India (RBI) today hiked the policy repo rate – for a fifth consecutive time – by 35 basis points to 6.25 %. The key interest rate has been hiked a total of 190 basis points – by 50 basis points thrice since June, and once by 40 basis points – during an off-cycle meet in May. The central bank increased the rate after inflation continues to stay above its tolerance band.
Governor Shaktikanta Das, delivering the Monetary Policy Committee (MPC) announcements, said that the FY23 real GDP forecast had been lowered to 6.8%, which is 0.1% lower than the revised estimates released by the World Bank yesterday. In addition, the RBI has maintained a FY23 Consumer Price Index (CPI) inflation forecast at 6.7%. Shaktikanta Das said he expects inflation to moderate as the winter harvest comes in. He further said that the RBI is ready to undertake liquidity operations to inject liquidity, but it will for durable signs of turn in liquidity cycle. He said the Rupee resilient and stable, but there is a need to focus on orderly evaluation of the exchange rate. He said forex exchange reserves have gone up by USD 36.7 Billion.
The RBI chief hailed the Indian economy’s performance in the face of global challenges like the war in Ukraine and the Covid-19 pandemic, and underlined that it is the fastest growing in Asia this year.
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