In line with expectations, the six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) on Wednesday increased the policy repurchase or repo rate by 25 basis points (bps) to a four-year high of 6.5 per cent.
The committee retained its stance of withdrawal of accommodation, though many thought that it would change this to neutral.
With the latest increase, the policy rate completed a cycle under RBI Governor Shaktikanta Das, as the repo rate was 6.5 per cent when he took charge in December 2018.
In his first policy as MPC chair, the committee reduced the rate by 25 bps to 6.25 per cent in February 2019.
With the latest hike, the central bank has now increased the rate by 250 bps since May 2022. Though the quantum of increase was lower this time than previous hikes, the central bank refused to drop its guard against inflation, as there was no indication that this could be the last increase, as most market participants had expected.
This story is from the February 09, 2023 edition of Business Standard.
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This story is from the February 09, 2023 edition of Business Standard.
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