Mumbai: In an unscheduled press-briefing on Wednesday, Reserve Bank of India (RBI) Governor Shaktikanta Das announced a 40-basis-point hike in repo rate to 4.40 percent and raised the cash reserve ratio by 50 basis points to 4.5 percent. One basis point is one hundredth of a percentage point. This is for the first time after August 2018, the RBI has hiked policy rates.
“Based on this assessment of the macroeconomic situation and the outlook, the MPC voted unanimously to increase the policy repo rate by 40 basis points to 4.40 per cent, with immediate effect. Consequently, the standing deposit facility (SDF) rate stands adjusted to 4.15 per cent; and the marginal standing facility (MSF) rate and the Bank Rate to 4.65 per cent. The MPC also decided unanimously to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth” Das said.
Following RBI’s surprise announcement, benchmark indices extended loses with all the sartorial indices trading in the red. While the BSE Sensex dropped more than 1306 point to 55,669.03 points, the NSE Nifty dropped by 391.50 points to 16677.60 points.