In a move that will raise borrowing costs for corporates and individuals even further, the RBI Monetary Policy Committee led by Governor Shaktikanta Das hiked Repo Rate by 50 basis points to 5.40 percent on Friday.
Repo is the rate at which the Reserve Bank of India lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. This is the third hike since the beginning of the current financial year, taking the rate back to pre-pandemic levels in order to tame the inflationary pressure.
The real GDP growth projection for 2022-23 is retained at 7.2 percent with Q1- 16.2 percent, Q2- 6.2 percent, Q3 -4.1 percent, and Q4- 4 percent with risks broadly balanced. The real GDP growth for Q1 2023-24 is projected at 6.7 percent, RBI Governor Shaktikanta Das addressing a press conference said.
Das also highlighted that consumer price inflation remains uncomfortably high while stating that inflation is expected to remain above 6 percent.
The six-member Monetary Policy Committee headed by Reserve Bank of India Governor Shaktikanta Das started deliberations on the bi-monthly policy review on Wednesday.