NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Supreme Court Of India
    Central Bureau Of Investigation (CBI)
    Indian Army
    Indian Railways
    Indian Air Force
    NewsBytes
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout


    India Business World Politics Sports Technology Entertainment Auto Lifestyle Inspirational Career Bengaluru Delhi Mumbai Visual Stories Find Cricket Statistics Phones Reviews Fitness Bands Reviews Speakers Reviews

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
     
    Home / News / India News / RBI hikes repo rate by 25 basis points to 6.5%
    India

    RBI hikes repo rate by 25 basis points to 6.5%

    RBI hikes repo rate by 25 basis points to 6.5%
    Written by Prateek Talukdar
    Feb 08, 2023, 10:50 am 2 min read
    RBI hikes repo rate by 25 basis points to 6.5%
    The Reserve Bank of India on Wednesday hiked the repo rate by 25 basis points to 6.5%

    The Reserve Bank of India (RBI) Governor Shaktikanta Das announced on Wednesday that the country's repo rate has been raised by 25 basis points to 6.5%. The decision came during this fiscal year's last policy review by the Monetary Policy Committee (MPC) amid ebbing inflation. The reverse repo rate remains unchanged at 3.35%.

    Why does this story matter?

    • The panel has so far increased the key rate by 250 points since May.
    • The repo rate is the interest rate that the RBI charges commercial banks while lending them money. The increase is intended to put the brakes on the banks' borrowing.
    • The rates have been hardened against the backdrop of heightened inflation due to the Russia-Ukraine crisis disrupting the global supply chain.

    Repo rate raised for the 6th time this fiscal year

    Four out of six members of the MPC supported the decision to raise the repo rate. It was increased last December by 0.35% for the fifth time this fiscal year, which was preceded by three back-to-back hikes of 50 basis points. Retail inflation has improved, and the United States (US) Federal Reserve is moderating its benchmark interest rate.

    RBI failed to keep inflation within 6%

    "Unprecedented events of the last three years have put to test monetary policy across the world. Emerging market economies are facing sharp tradeoffs between supporting economic activity and controlling inflation while preserving policy credibility," Das said. Tasked with maintaining retail inflation at 4% with a 2% margin, the RBI failed to contain the inflation rate within 6% for three consecutive quarters since January 2022.

    Highest repo rate in 7 years

    The new repo rate of 6.5% is the highest since February 2019. Das recently stated that with COVID-19 restrictions easing and inflation falling in many countries, central banks in many countries were moving toward lower rate hikes or pauses. In view of this, the RBI cut down its inflation forecast for the fiscal year 2023-24 averaging 5.3%.

    GDP growth for the next fiscal year forecast at 7%

    The RBI forecasts inflation in Q1 of the fiscal year 2023-24 at 5%, Q2 and Q3 at 5.4%, and Q4 at 5.6%. The real GDP growth for FY24 has been pegged at 6.4% and for FY23 at 7%. Das said that despite the revision in the growth projection for FY23, India will remain among the fastest-growing major economies in the world.

    Share this timeline
    Facebook
    Whatsapp
    Twitter
    Linkedin
    Reserve Bank Of India (RBI)
    Repo Rate
    Monetary Policy Committee
    Inflation

    Reserve Bank Of India (RBI)

    RBI is looking into Indian banks' exposure to Adani Group Adani Group
    ICICI bank fraud case: Videocon's Venugopal Dhoot gets interim bail Venugopal Dhoot
    World's biggest ship skips India amid lack of port infrastructure Adani Ports
    Meet BV Nagarathna, SC judge who dissented from demonetization verdict Supreme Court Of India

    Repo Rate

    RBI increases key repo rate by 35 bps to 6.25% Reserve Bank Of India (RBI)
    Monetary policy: RBI hikes repo rate by 50bps to 5.9% Reserve Bank Of India (RBI)
    RBI maintains lending rates; 7.8% GDP growth projected in 2022-23 Reserve Bank Of India (RBI)
    RBI keeps repo rate at 4%, cuts GDP growth projection India

    Monetary Policy Committee

    RBI hikes repo rate by 40 bps to 4.4% Shaktikanta Das
    RBI keeps key interest rates unchanged for 11th consecutive time India
    RBI keeps repo rate unchanged at 4% Reserve Bank Of India (RBI)
    RBI MPC keeps repo rate unchanged at 4% Reserve Bank Of India (RBI)

    Inflation

    Pakistan hikes petrol, diesel prices by PKR 35/liter amid crisis Pakistan News
    Budget session of Parliament from January 31 to April 6 Budget Session
    World economy will face recession in 2023, warns CEBR India
    Union Budget 2023: Finance Minister Nirmala Sitharaman begins pre-budget talks Nirmala Sitharaman

    Love India News?

    Subscribe to stay updated.

    India Thumbnail
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2023