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Mumbai: The Monetary Policy Committee of the Reserve Bank of India on Wednesday raised Repo Rate by 25 basis points to 6.5 percent with immediate effect. Consequently, the standing deposit facility (SDF) rate stands adjusted to 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 6.75 percent.

“On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (February 8, 2023) decided to Increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.50 per cent with immediate effect. Consequently, the standing deposit facility (SDF) rate stands adjusted to 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 6.75 per cent” said RBI Governor Shaktikanta Das.

“The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth” he added.

 

RBI Governor Das said, while inflation is expected to moderate in FY24, it is likely to roll above the 4 percent target.

The real GDP growth for 2023-24 financial year projected at 6.4 percent, whith Q1 growth projection at 7.8 percent, Q2 at 6.2 percent, Q3 at 6 percent and Q4 at 5.8 percent.

Inflation is projected at 5.3 percent in the 2023-24 financial year, with Q1 at 5 percent, Q2 at 5.4 percent, Q3 at 5.4 percent and Q4 at 5.6 percent.

This is the last MPC meeting in the 2022-23 financial year. The next bi-monthly MPC meeting will be held in the first week of April.