RBI monetary policy: Repo rate hiked by 50 bps to 5.4%, back to pre-pandemic levels

Mumbai: The repo rate has been hiked by 50 basis points to 5.4 per cent by the Reserve Bank Monetary Policy Committee on Friday. The Standing Deposit Facility (SDF) stands adjusted to 5.15 per cent. Notably, it is for the third consecutive time, the repo rate has been increased by the Reserve Bank of India (RBI) in order to tame the inflationary pressure. “RBI has hiked repo rate by 50 bps to 5.40 per cent with immediate effect. Repo rate is now back to pre-pandemic levels, highest since August 2019,” RBI Governor Shaktikanta Das announced today. The Marginal Standing Facility (MSF) and bank rate revised at 5.65 per cent. RBI retains GDP growth forecast for FY23 at 7.2 per cent RBI Governor Shaktikanta Das said that the FY23 GDP growth forecast has been retained at 7.2 per cent. April-June GDP growth is seen at 16.2 per cent, while July-September GDP growth seen at 6.2 per cent. The October-December GDP growth seen at 4.1 per cent, while January-March 2023 GDP growth seen at 4.0 per cent. RBI retains CPI inflation forecast for FY23 at 6.7 per cent The RBI Governor said that the household inflation expectations have eased, but remain elevated. CPI inflation for July-September is seen at 7.1 per cent, October-December is seen at 6.4 per cent, while January-March 2023 is pegged at 5.8 per cent. Governor Shaktikanta Das said that the consumer price inflation has eased from its surge in April but remains uncomfortably high and above upper threshold of target. RBI on Inflation Inflation is expected to remain above the RBI’s 6 per cent threshold in the second and third quarters of the current fiscal year, for which the MPC stressed that sustained high inflation could destabilise inflation expectations and harm growth in the medium, Das said. RBI on rupee depreciation Governor Shaktikanta Das said rupee has fared much better than many reserve currencies or Asian currencies. “Depreciation of rupee is due to strength of the dollar, rather than any weakness in India’s macro fundamentals. Remain focused on maintaining the stability of the rupee,” he added. RBI says FDI inflows have improved The RBI Governor said that FDI inflows improved to USD 13.6 billion in the first quarter of the current fiscal, against USD 11.6 billion in the corresponding period last year. He further said that FPIs after remaining in exit mode in first quarter have turned positive in July, said RBI Governor. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.