Mumbai : The Monetary Policy Committee (MPC) of the Reserve Bank of India on Friday raised repo rate by 50 basis points to 5.4 percent. With this, the repo rate has reached to the pre-pandemic level. MSF and bank rate has been revised to 5.65%, announced RBI governor Shaktikanta Das. One bps is one-hundredth of a percentage point.
“On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (August 5, 2022) decided to Increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.40 per cent with immediate effect. Consequently, the standing deposit facility (SDF) rate stands adjusted to 5.15 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.65 per cent. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth” he said.
The real GDP growth projection for 2022-23 is retained at 7.2% with Q1- 16.2%, Q2- 6.2%, Q3 -4.1% and Q4- 4% with risks broadly balanced. The real GDP growth for Q1 2023-24 is projected at 6.7%, said Das.
The Inflation is projected at 6.7 in 2022-23. Huge buffer stocks will provide moderate impact on inflation, he said.