RBI's monetary policy - RBI hikes repo rate by 35 basis points (bps)

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RBI's monetary policy

The Reserve Bank of India (RBI) on 7 December raised its key repo rate, or the key lending rate, by 35 basis points (bps) to 6.25%, to curb lingering inflation pressures. This is the fifth time in a row that the RBI has increased the repo rate this year.

Important facts

  • The decision was announced by the six-member Monetary Policy Committee (MPC) headed by Reserve Bank of India (RBI) Governor Shaktikanta Das.

  • Earlier, the RBI had increased the repo rate by 40 bps in May and 50 bps each in June, August and September.

  • The RBI policy rate is now at its highest level since August 2018.

  • The RBI also cut the growth forecast for the current financial year to 6.8 per cent. 

  • Standing deposit facility (SDF) rate stands adjusted to 6.00 per cent.

  • The marginal standing facility (MSF) rate and the bank rate have been kept at 6.50 per cent.

  • In FY23 Consumer Price Index (CPI) estimate at 6.7 per cent. It remains unchanged.

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