RBI Revises Repo Rate For 3rd Time In 2022-23 Financial Year

Bhubaneswar: The Reserve Bank of India (RBI) on Friday increased the repo rate by 50 basis points (BSP) to 5.4 per cent with immediate effect.

The Monetary Policy Committee (MPC), which resets the repo rate, held a meeting for three days from August 3 to deliberate on the prevailing economic situation.

Following the decision of the MPC, RBI Governor Shaktikanta Das announced the revision. “MPC decided to focus on withdrawal of accommodation to keep inflation within target while supporting growth,” India Today quoted him as saying.

The MPC decided that the Standing Deposit Facility (SDF) rate stands adjusted to 5.15 per cent and the Marginal Standing Facility (MSF) rate and bank rate at 5.65 per cent.

The real GDP growth projection for 2022-23 is retained at 7.2 per cent. The GDP growth is projected at 16.2% in first quarter, 6.2% in second, 4.1% in third and 4% in the last quarter. The real GDP growth for Q1 2023-24 is projected at 6.7%, Das said.

This is RBI’s third repo rate hike in the current financial year. In its off-cycle monetary policy review in May, the central bank had hiked the policy repo rate by 40 basis points or 0.40 per cent to 4.40 per cent. In June, the RBI further raised the rate to 4.90 per cent, a 50 basis points increase.

The latest revision of BSP crossed the pre-pandemic level of 5.15%.