The Reserve Bank of India met for policy decision during February 6-8 and the RBI governor Shaktikanta Das announced a hike in repo rate for the sixth time in a row, by 25 bps to 6.50% with immediate effect. In its December monetary policy review, the central bank had raised the key benchmark interest rate by 35 basis points (bps)
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Here are the key highlights from the policy speech:
1. RBI has hiked the repo rate by 25 bps to 6.50% with immediate effect. Accordingly, SDF (Standing Deposit Facility) rate adjusted to 6.25% from 6%; and MSF (Marginal Standing Facility) rates hiked by 25 bps to 6.75%.
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“The MPC decided by a majority of 4 members out of 6 to increase the policy repo rate by 25 basis points to 6.50 per cent, with immediate effect,” said the policy statement.
2. RBI’s Monetary Policy Committee to remain focused on the withdrawal of the accommodative policy. “The MPC also decided by a majority of 4 out of 6 members to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth,” said the policy statement.
3. RBI puts GDP growth estimates at 6.4% for 2023-24
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4. RBI estimates retail inflation to trend lower at 6.5% for FY23 from 6.7%; 5.3% for next fiscal
5. Current account deficit is expected to moderate in second half of 2022-23 and remain eminently manageable, said RBI governor in his speech.
6. The market hours for the Government Securities market have been restored to the pre-pandemic timing of 9 am to 5 pm
