Finance
The Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 6.5 percent, Governor Shaktikanta Das announced on Wednesday (February 8). Since May of last year, the RBI has raised the repo rate by a total of 250 basis points.
“Rate hike of 25 basis points is considered appropriate at this juncture. Monetary policy will remain agile and alert to inflation,” Das said.
The repo rate is the interest rate charged by the RBI when commercial banks borrow money from it.
The RBI governor stated that the global economy is improving and that inflation appears to be decreasing. “RBI’s MPC decided 4:2 vote to remain focused on withdrawal of accommodative policy,” he said. The RBI also projected India’s GDP growth at 6.4 per cent for 2023-24.
The Central bank has projected retail inflation at 6.5 per cent for 2022-23 and 5.3 per cent for the next fiscal.
In December 2022, the MPC hiked the Repo rate — the key policy rate — by 35 basis points to 6.25 per cent in a bid to rein in retail inflation.
“The global economic outlook doesn’t look as grim now as it did a few months ago, growth prospects in major economies have improved while inflation is on a descent though inflation still remains well-above the target in major economies,” RBI Governor Shaktikanta Das said on Wednesday.
Flagging the unprecedented contractions facing monetary policy, he said: “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.”
Fixed deposits: Most banks now offer rates of 7% or higher on fixed deposits. Most banks provide a 50 BPS discount to senior citizens. These rates are based on two-year tenors. This is an excellent time to lock in these low rates.
Source:IE
