The Reserve Bank of India today 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.
RBI Governor Shaktikanta Das 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 percent, while Marginal Standing Facility rate is at 5.15 per cent.
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. Process of recovery in emerging market economies is also getting affected. But the Indian economy has remained resilient.
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 crisis on our economy. The steps will be measured and calibrated, Mr Das added.
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 RBI Governor said.
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.
The 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.
The real GDP forecast for FY23 has been retained at 7.2 percent. Shaktikanta Das said
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