RBI MPC Meeting Live Updates: Inflation has peaked and will moderate, says Shaktikanta Das

TNN Bureau. Updated: 8/5/2022 5:54:20 PM Business and Economy

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on Friday hiked the repo rate by 50 basis points (bps) to 5.40 per cent with immediate effect, RBI Governor Shaktikanta Das announced.

This is the third rate hike by the central bank in this financial year. Prior to this, the RBI had raised the repo rate – by 40 bps in an off-cycle meeting in May and 50 bps in June. The market experts expected the MPC to raise the repo rate by at least 35 basis points (bps) in this meeting.

The retail inflation or Consumer Price Index (CPI), which the RBI factors in while considering its benchmark lending rate, stood at 7.01 per cent in June. Retail inflation has continued to remain above the central bank’s comfort level of 6 per cent since January this year.

In his address, Das said that the MPC vote was unanimous and said that the MPC has decided to remain focused on withdrawal of the accommodative stance to check inflation. Additionally, he announced that the standing deposit facility (SDF) rate stands adjusted to 5.15 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.65 per cent.

In his speech today, Das said that the Indian economy has been grappling with high inflation and added that India has been facing a $13.3 billion capital outflow in the last few months.

He noted that the financial sector remains well capitalised and India’s forex reserves provide insurance against global spillovers.

Speaking on growth, Das said that the real GDP growth projection for 2022-23 is retained at 7.2 per cent with Q1 at 16.2 per cent, Q2 at 6.2 per cent, Q3 at 4.1 per cent and Q4 at 4.0 per cent with risks broadly balanced. However, he cautioned that there are risks from the ongoing Russia-Ukraine war.

Comment on this Story