Much on the expected lines, the RBI has increased the policy repo rate by 50 basis points. The revised repo rate stands at 4.90% with immediate effect.
The Monetary Policy Committee that met on June 6-8 unanimously decided to raise the rates on the back of inflationary pressures and higher supply shocks.
Consequently, the SDF (Standing Deposit Facility) rate stands adjusted to 4.65%. and the Marginal Standing Facility (MSF) rate and the bank rate to 5.15%.
Announcing the policy decision, RBI Governor Shaktikanta Das stated that war has led to the globalisation of inflation. “Food, energy and commodity prices remain elevated. Countries across the world are facing inflation at decadal highs, and persistent demand-supply imbalances. In these circumstances, we have started a gradual and orderly withdrawal of extraordinary accommodation instituted during the pandemic. The RBI will continue to be proactive in mitigating the fallout of the ongoing geopolitical tensions on our economy. Our approach underscores a commitment to move towards normal monetary conditions in a calibrated manner and our steps will be measured.”
