RBI raises repo rate by 50 bps
to 5.4%; withdraws accommodative stance
Friday, the six-member Monetary Policy Committee of the Reserve Bank of India
(RBI) decided to hike the repo rate by 50 basis points to 5.4%.
bi-monthly meeting of the RBI MPC started on Wednesday, and RBI Governor
Shaktikanta Das on Friday announced that the MPC unanimously decided to hike
the policy rate.
is RBI's third rate hike in the current financial year. In its off-cycle monetary
policy review in May, the RBI hiked the policy repo rate by 40 basis points or
0.40 per cent to 4.40 per cent. Then in June, the RBI further raised the rate
to 4.90 per cent, a 50 basis points increase.
repo rate is the interest rate at which the central bank lends funds to banks.
to a BS poll, the MPC was expected to raise the repo rate by 35-50 bps from the
current 4.9 per cent, taking the policy rate to pre-pandemic levels. The Repo
rate was 5.15 per cent (February 2020) before the RBI started cutting interest
rates to fight the economic slump amid the Covid-19 havoc.