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RBI increases repo rate by 35bps to 6.25%
December 07, 2022
The RBI policy rate is now at its highest level since August 2018.
This is the fifth rate hike by the central bank in this financial year. Prior to this, the RBI had raised the repo rate by 40 bps in an off-cycle meeting in May and 50 bps in June, August and September.
Most market experts expected the MPC to raise the repo rate by 35 bps in this meeting to tame the raging inflation which has continued to remain above the 6 per cent mark for the 10 straight month in October.
The RBI governor further announced that the MPC decided to remain focused on the withdrawal of accommodation and added that the standing deposit facility (SDF) rate stands adjusted to 6.00 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 6.50 per cent.
During his speech, the RBI governor said that the policy rate remains accommodative and noted that the core inflation is indicating stickiness. The medium-term inflation outlook is exposed to global developments and weather.
Commenting on India’s economic growth, Das said the growth is supported by rural, manufacturing and services sector.
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