On the expected lines, the Reserve Bank of India’s Monetary Policy Committee has increased the policy repo rate by 35 basis points to 6.25%. This is the fifth rate hike by the central bank in this financial year.
Announcing the decision of the MPC, RBI Governor Shaktikanta Das stated that the stance of the central bank remains focussed on the withdrawal of accommodation, as the battle against inflation is not over yet. The central bank maintained its 6.7% inflation forecast for the current fiscal year ending March.
GDP growth forecast has been revised downwards to 6.8%. In its last policy statement on September 30, the MPC had projected GDP growth for the ongoing financial year at 7%.
Standing deposit facility rate, and marginal standing facility rate have also been increased by 35bps each to 6% and 6.5%.
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