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By Akanksha Upadhyay Feb 8, 2023 11:51:08 AM IST (Updated)
The Reserve Bank of India (RBI) on Wednesday hiked the repo rate by 25 basis points (bps) to 6.50 percent by a majority of 4-2. The three-day meeting of the Monetary Policy Committee (MPC) started on Monday.
In its first monetary policy review after the Union Budget 2023, the Reserve Bank of India (RBI) decided to raise the policy repo rate by 25 basis points by a majority and keep a 'strong vigil' on the inflation outlook. The three-day meeting of the Monetary Policy Committee (MPC) started on Monday and the rate hikes were announced on Wednesday, February 8.
This is the sixth time the interest rate has been hiked by the RBI since May last year, taking the total quantum of the hike to 250 basis points. "Policy rate at 6.5 percent 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 year but remain above the 4 percent level. The RBI is mandated to keep inflation at 4 percent with a margin of 2 percent on either side.