31 March Friday

RBI Hikes Repo Rate; Interest Rate To Go Up

Web Desk(Tvm)Updated: Wednesday Feb 8, 2023

New Delhi: The Monetary Policy Committee(MPC) of Reserve Bank of India on Wednesday raised repo rate by 25 basis points to 6.5 percent in a 4:2 majority.

As per the MPC, inflation remains a major risk in coming time. Hence, the rate-setting panel is of the view thatfurther calibrated monetary policy action is essential to keep inflation expectations anchored, breake core inflation and strengthen medium-term prospects.

This was the first monetary policy handout of the year. In its last review during December of 2022, the RBIhad raised key benchmark interest rate by 35 bps. In period beginning with May last year, the apex bank has shot short-term lending rates by 250 basis points, today’s hike included - all the time to rein in rising iflation.

Repo rate is the rate at which the central bank(RBI) lends money to commercial banks.