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RBI Monetary Policy Meet Live Updates: Repo rate hiked by 50 bps to 4.90%

RBI policy announcement today live updates: The six-member Monetary Policy Committee (MPC) headed by Reserve Bank of India (RBI) Governor Shaktikanta Das hiked the repo rate by 50 bps to 4.90 per cent. Here's what the Indian central bank chief announced.

Reserve Bank of India Governor Shaktikanta Das interacts with the media (Express Photo by Tashi Tobgyal)

RBI MPC Meet LIVE Updates: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on Wednesday hiked the repo rate by 50 basis points (bps) to 4.90 per cent, RBI Governor Shaktikanta Das announced.

The move comes barely a month after the central bank in a surprise off-cycle meeting had jacked up the repo rate, the main policy rate, by 40 basis points to 4.40 per cent to bring down the elevated inflation and tackle the impact of geopolitical tensions. Last month, Das in an interview with CNBC-TV18 had indicated that the central bank would continue to hike policy interest rates to bring down inflation but refused to say whether it will be raised to the pre-pandemic level.

In his speech today, Das said that the MPC vote was unanimous. Additionally, he said the standing deposit facility (SDF) rate stands adjusted to 4.65 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.15 per cent. He noted that the repo rate remains below the pre-pandemic level.

Das said that the MPC voted unanimously to remain focused on the withdrawal of accommodation to ensure inflation remains within target going ahead.

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The central bank governor said that the Indian economy remains resilient and added that the RBI will remain supportive of growth. He added that RBI’s steps will be calibrated, and focused on bringing down inflation to the target level.

Speaking on the inflation, Shaktikanta Das said that the inflation is likely to remain above 6 per cent in the first three-quarters of the current fiscal. He added that the upside risk to inflation persists. A recent spike in tomato and crude prices fuelling inflation. The RBI raised its inflation forecast for the financial year 2022-23 (FY23) to 6.7 per cent from its earlier estimate of 5.7 per cent.

“With the assumption of a normal monsoon, in 2022 and average crude oil price in the Indian basket of 105 dollars per barrel, inflation is now projected at 6.7 per cent in 2022-23,” Das said.

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On the demand front, he said that while the urban demand is improving, rural demand gradually recovering.

Speaking on growth, RBI retained its growth projection at 7.2 per cent for the current fiscal. Das said the Indian economy remained resilient, and the central bank will continue to support growth.

The RBI expects growth in the first quarter of the current fiscal at 16.2 per cent, which will taper to 4 per cent by the fourth quarter. He, however, cautioned that there are risks from the ongoing Russia-Ukraine war.

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First published on: 08-06-2022 at 10:05:08 am
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