New Delhi : The Governor of the Reserve Bank of India (RBI), Shaktikanta Das, has announced that the majority vote of the Monetary Policy Committee (MPC) has led to an increase in the repo rate by 25 basis points to 6.5%. The standing deposit facility will be updated to 6.25% and the marginal standing facility to 6.75%.
According to Mr. Das, the past three years have challenged monetary policy around the world and emerging economies are balancing economic activity, inflation control, and policy credibility. Although the global economy is not as concerning as it was a few months ago, inflation remains above target in major economies. The RBI governor also stated that inflation is expected to average 5.6% in Q4 2023-24.
In December, the RBI raised the repo rate by 35 basis points after three consecutive hikes of 50 basis points each. In response to the disruption of the global supply network caused by the Russia-Ukraine war, the central bank held a bi-monthly monetary review meeting and made policy changes. During the current fiscal year, the RBI first raised the policy rate by 40 basis points in May 2022, followed by three more rate hikes of 50 basis points each between June to October, and a 35 basis point hike in December.