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RBI likely to hike benchmark interest rate by 25bps
April 03, 2023
The Monetary Policy Committee (MPC) of the Reserve Bank will be meeting for three days on April 3, 5 and 6 to take into account various domestic and global factors before coming out with the first bi-monthly monetary policy for fiscal 2023-24.
The Reserve Bank of India (RBI) has already increased the repo rate by a total of 250 basis points since May in a bid to contain inflation though it has continued to remain above the central bank’s comfort zone of 6 per cent for most of the time.
The two key factors which the RBI Governor headed committee will deliberate intensely while firming up the next monetary policy are elevated retail inflation and the recent action taken by central banks of developed nations especially the US Federal Reserve, the European Central Bank and Bank of England.
Having remained below six per cent for two months (November and December 2022), the retail inflation breached the comfort zone warranting action by the Reserve Bank.
The Consumer Price Index (CPI)-based inflation was 6.52 per cent in January and 6.44 per cent in February.
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