Lagatar24 Desk
New Delhi, Feb 8: The Monetary Policy Committee (MPC) increased the key interest rate by 25 basis points, bringing the repo rate to 6.5 percent, RBI Governor Shaktikanta Das announced on Wednesday.
The governor reported that four of the MPC’s six members voted in favour of the immediate hike.
“Based on an assessment of the macroeconomic situation and its outlook, the MPC decided to increase the policy repo rate by 25 basis points to 6.5 per cent, with immediate effect,” he said.
He added that the MPC has chosen to maintain its ‘’withdrawal of accommodation’ posture in order to sustain growth while ensuring that inflation stays within the goal going forward.
The Standing Deposit Facility (SDF) rate will be updated to 6.25 percent, and the Marginal Standing Facility (MSF) rate will be raised to 6.75 percent, according to Governor Das.
Regarding inflation, the governor stated that a sharp drop in vegetable prices caused consumer price inflation (CPI) to fall below the upper tolerance level of 6% for November and December 2022. He did admit that core inflation is still persistently stubborn.
“Looking ahead, while inflation is expected to moderate in 2023-24, it is likely to remain above the 4 per cent target. The outlook is clouded by continuing uncertainties from geopolitical tensions, global financial market volatility, rising non-oil commodity prices and volatile crude oil prices,” he said.
On growth, he said economic activity in India remains resilient and projected the real GDP growth at 6.4 per cent for 2023-24. The growth in Q1FY24 has been projected at 7.8 per cent, Q2 at 6.2 per cent, Q3 at 6 per cent and Q4 at 5.8 per cent.
