The Reserve Bank on Wednesday hiked key benchmark policy rate by 25 basis points to 6.5 per cent, citing sticky core inflation.
This is the sixth time interest rate has been hiked by the Reserve Bank of India (RBI) since May last year, taking the total quantum of hike to 250 basis points.
Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) by a majority decided to raise the policy repo rate by 25 basis points and keep a ‘strong vigil’ on inflation outlook.
“Policy rate at 6.5 per cent still trails the pre-pandemic level,” Das said, adding that core inflation will remain sticky. Core inflation generally refers to inflation in manufactured goods.
The governor said the inflation will moderate in the next fiscal but remain above the 4 per cent level. The RBI is mandated to keep inflation at 4 per cent with a margin of 2 per cent on either side.
For the next fiscal, the RBI projected a growth rate of 6.4 per cent.
In the latest Economic Survey of the finance ministry, growth projection was 6-6.8 per cent for 2023-24. According to Das, retail inflation will average 6.5 per cent in the current fiscal and moderate to 5.3 per cent in 2023-24.
Indian economy has remained resilient demand global headwinds, Das said.
.RBI’s MPC decided 4:2 vote to remain focused on withdrawal of accommodative policy
.RBI Governor says world economy does not look so grim now, inflation coming down.
.Amid volatile global developments, Indian economy remains resilient
.Weak global demand, current economic environment would be a drag on domestic growth
.Core inflation remains sticky
.RBI to maintain strong vigil on evolving economic situation
.Retail inflation expected to average 56 pc in Q4
.Reserve Bank projects GDP growth at 6.4 pc for 2023-24.
.RBI projects retail inflation at 6.5 pc for 2022-23; 5.3 pc for next fiscal
.Rate hike of 25 bps is considered appropriate at this juncture, monetary policy to remain agile, alert to inflation
.Timing of govt securities market restored to pre-pandemic level of 9 am to 5 pm; RBI to permit lending, borrowing of G-secs
.Indian rupee remained least volatile among its Asian peers in 2022 and so far this year
.Current account deficit to moderate in second half of 2022-23 and remain eminently manageable
.RBI proposes to extend UPI facility to inbound travellers for merchant payments; initially to travellers from G20 countries
