Quick RBI MPC Update: Repo Rate Hike, Bank Rates & Guv’s Inflation Outlook

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Quick RBI MPC Update: Repo Rate Hike, Bank Rates & Guv’s Inflation Outlook
Credit: © Reuters.

By Malvika Gurung

Investing.com -- The Monetary Policy Committee (MPC) of RBI hiked the repo rate by 50 basis points to 5.4% on Friday. With this third consecutive rate hike, the benchmark lending rate has reached its pre-pandemic levels, the highest since August 2019.

Ahead of the Covid-19 pandemic, the repo rate was 5.15%.

The central bank’s MPC has adjusted the Standing Deposit Facility (SDF) rate to 5.15% and revised the MSF and bank rate at 5.65%.

The committee has held on to its ‘Withdrawal of Accommodation’ stance to keep a check on the mounting inflation.

RBI Governor Shaktikanta Das has informed that the domestic economic activity is showing broadening whereas rural demand shows mix trend.

“Volatility in global financial markets is impinging upon domestic financial markets leading to imported inflation. 

Inflation is expected to remain above the central bank's 6% threshold in the second and third quarters of this fiscal year, for which the MPC stressed that sustained high inflation could destabilise inflation expectations and harm growth in the medium,” Das added.

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