The Reserve Bank of India's monetary policy committee (MPC) on December 7 hiked the key repo rate by 35 basis points (bps) to 6.25 % in its December 2022 meeting, continuing its fight against inflation. The central bank has raised its key policy rate as inflation continues to stay above its tolerance band. RBI had slashed the repo rate in March, 2020 with an aim to cushion the impact of covid-induced lockdown, and maintained status-quo in the benchmark interest rate for almost two years before increasing it on May 4, 2022. The RBI has raised rates by a total 190 basis points since its first unscheduled mid-meeting hike in May. Governor Shaktikanta Das, delivering the Monetary Policy Committee (MPC) announcements, also said the FY23 real GDP forecast had been lowered to 6.8% - 0.1% lower than revised estimates released Tuesday by the World Bank. In addition, the RBI has also maintained FY23 consumer price index (CPI) inflation forecast at 6.7%.
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