New Delhi : The Reserve Bank of India’s Monetary Policy Committee(MPC) announced a hike of 50-basis-point hike in repo. rate - the rate at which the central bank lends short-term short term funds to banks With this, all cuts made during the pandemic has been reversed and the effect translates to a repo rate of 5.4 percent for now.
The raised repo rate would also mean banks will in turn, charge its customers a higher interest.
The MPC said the rate-setting panel was focused on withdrawal of accommodation - a note spelt in its June policy statement in which it said the hike was part of its fight to put down rising inflation.
The Consumer Price Index(CPI) inflation has remained above the upper band of RBI’s mandated 2 - 6 percent range for six straight months up to June2022.
The June inflation print figured at 7.01 percent while the RI’s medium-term target for CPI inflation is 4 percent.
Meanwhile, the rupee appreciated sharply versus US dollar at 79.07 compared to 79.47 per dollar on Thursday closing.