RBI Monetary Policy: Repo Rate Hiked By 25 Bps To 6.5%; Loan EMIs May Go Up 

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• Feb 8, 2023 | Dhupali Das

RBI Monetary Policy: The Reserve Bank of India (RBI) Governor Shaktikanta Das has announced that the monetary policy committee (MPC) has decided on a majority to hike the repo rate by 25 basis points to 6.5 percent...

Digital Desk: The Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the monetary policy committee (MPC) has decided on a majority to hike the repo rate by 25 basis points to 6.5 percent. The standing deposit facility (SDF) will stand revised to 6.25 percent, and the marginal standing facility (MSF) will be revised to 6.75 percent.

"Unprecedented developments of the last three years have put to stress monetary policy across the world. Emerging market economies must choose between promoting economic activity and limiting inflation while maintaining policy credibility. The global economic prognosis is not as bleak as it was a few months ago; growth prospects in major nations have improved, while inflation has begun to fall, but inflation in key economies remains considerably above target," said RBI Governor Shaktikanta Das.

Das also added that inflation is expected to average 5.6 percent in the fourth quarter of 2023-24.

The RBI raised the repo rate by 35 bps in its December monetary policy review meeting, following three consecutive hikes of 50 bps each. Following the disruption of the global supply network caused by the commencement of the Russia-Ukraine conflict, India's central bank initiated the bi-monthly monetary review meeting and policy modifications. In this fiscal year, the RBI raised the policy rate by 40 basis points (bps) in May 2022, followed by three consecutive rate hikes of 50 bps each from June to October and 35 bps in the December meeting.