IANSHINDIThe Reserve Bank of India on Wednesday raised the repo rate by 35 basis points to 6.25%, while maintaining its stance of focussing on the “withdrawal of accommodation”.
The repo rate hike decision was taken by a majority of 5 out of the 6 members of the Monetary Policy Committee.
4 out of 6 members voted in favour of retaining the stance of focussing on the withdrawal of accommodation.
The 35 bps hike in repo rate by the central bank was in line with what economists had predicted.
The MPC felt that a further calibrated approach to monetary policy action is essential in order to keep inflation expectations anchored, break the core inflation persistence, and contain second round effects, Governor Shaktikanta Das said in a media address.
The central bank has gone easy on rate hikes for the first time since the beginning of the rate tightening cycle in May.
The RBI began tightening its policy with a 40 bps hike in the repo rate. Post this, it has hiked the rates by 50 bps for three consecutive times.
With today’s move, the central bank has cumulatively hiked interest rates by 225 bps points.
Although commodity, energy, and food prices have eased, inflation remains high and broad based world over, Das said.
In October, India’s headline inflation based on the consumer price index eased to a 3-month low of 6.77% from 7.41% in September. However, for 10 consecutive months, inflation has remained well above RBI’s medium-target range of 2-6%.
INFLATION BATTLE NOT OVER
Although commodity, energy, and food prices have eased, inflation remains high and broad based world over, Das said.
In October, India’s headline inflation based on the consumer price index eased to a 3-month low of 6.77% from 7.41% in September. However, for 10 consecutive months, inflation has remained well above RBI’s medium-target range of 2-6%.
Core inflation remains sticky and elevated, indicating that the “problem of inflation is not over, and the battle against inflation continues,” Das said.
This reflects in the inflation projections of the central bank, which shows that CPI inflation will remain above RBI’s targeted range of 2-6% till the second quarter of 2023-24 (April-March).
RBI has projected headline inflation based on the consumer price index to be at 6.7% in FY23, 6.6% in Apr-Jun quarter of FY24, and 5.9% in Jul-Sep of FY24, with risks evenly balanced.
The inflation projections assume India’s crude oil basket at an average $100 a barrel.
More to come...
The repo rate hike decision was taken by a majority of 5 out of the 6 members of the Monetary Policy Committee.
4 out of 6 members voted in favour of retaining the stance of focussing on the withdrawal of accommodation.
The 35 bps hike in repo rate by the central bank was in line with what economists had predicted.
The MPC felt that a further calibrated approach to monetary policy action is essential in order to keep inflation expectations anchored, break the core inflation persistence, and contain second round effects, Governor Shaktikanta Das said in a media address.
The central bank has gone easy on rate hikes for the first time since the beginning of the rate tightening cycle in May.
The RBI began tightening its policy with a 40 bps hike in the repo rate. Post this, it has hiked the rates by 50 bps for three consecutive times.
With today’s move, the central bank has cumulatively hiked interest rates by 225 bps points.
Although commodity, energy, and food prices have eased, inflation remains high and broad based world over, Das said.
In October, India’s headline inflation based on the consumer price index eased to a 3-month low of 6.77% from 7.41% in September. However, for 10 consecutive months, inflation has remained well above RBI’s medium-target range of 2-6%.
INFLATION BATTLE NOT OVER
Although commodity, energy, and food prices have eased, inflation remains high and broad based world over, Das said.
In October, India’s headline inflation based on the consumer price index eased to a 3-month low of 6.77% from 7.41% in September. However, for 10 consecutive months, inflation has remained well above RBI’s medium-target range of 2-6%.
Core inflation remains sticky and elevated, indicating that the “problem of inflation is not over, and the battle against inflation continues,” Das said.
This reflects in the inflation projections of the central bank, which shows that CPI inflation will remain above RBI’s targeted range of 2-6% till the second quarter of 2023-24 (April-March).
RBI has projected headline inflation based on the consumer price index to be at 6.7% in FY23, 6.6% in Apr-Jun quarter of FY24, and 5.9% in Jul-Sep of FY24, with risks evenly balanced.
The inflation projections assume India’s crude oil basket at an average $100 a barrel.
More to come...
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