RBI hikes Repo rate by 25 bps to 6.25, Loan EMIs to get costly

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GDP Forecast retained at 7.4%

Mumbai : The Monetary Policy Committee (MPC) of the Reserve Bank of India today decided to raise Repo Rate by 25 basis points to 6.25% shattering all hopes for easing of  bank EMI.  Consequently, the reverse repo rate under the LAF stands adjusted to 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.50 per cent.

“The decision of the MPC is consistent with the neutral stance of monetary policy 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” the RBI said releasing the second bi-monthly monetary policy statement.

The RBI has revised the  headline inflation to 4.8-4.9% in the first half of the current fiscal and 4.7% in the second half.  However, the GDP growth for 2018-19 has been retained at 7.4 per cent as in the April policy. GDP growth is projected in the range of 7.5-7.6 per cent in H1 and 7.3-7.4 per cent in H2.

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