RBI Hikes Repo Rate by 35 Bps, Retains Accommodation Withdrawal Stance

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RBI Hikes Repo Rate by 35 Bps, Retains Accommodation Withdrawal Stance
Credit: © Reuters.

By Malvika Gurung

Investing.com -- The Monetary Policy Committee (MPC) of RBI has hiked the repo rate by 35 basis points on Dec 7, 2022, snapping a three-consecutive 50 bps rate hike streak, and taking the benchmark lending rate to 6.25% after a three-day policy meeting starting on Dec 5.

The central bank’s benchmark rate-setting panel has raised the key lending rate in line with Investing.com’s forecast of a 35 bps rate hike.

The monetary policy committee has continued to retain its ‘Withdrawal of Accommodation’ stance in a 4:6 vote, to arrest inflation under the target 2-6% tolerance band.

India’s retail inflation declined sharply to 6.77% in Oct to a 3-month low, mainly due to easing food prices, yet remaining above RBI’s mandated tolerance band of 2-6% for the 10th consecutive month.

RBI has hiked the repo rate by as much as 190 basis points since May, in attempts to tame soaring inflation that has been staying above the central bank’s upper tolerance limit for over three quarters now.

Indian equity benchmark indices Nifty50 and Sensex rose up to 0.2% following the RBI’s policy outcome, while Nifty PSU Bank surged 0.8% and Nifty Bank climbed 0.34%.

Read Also: Warm-Up: RBI MPC Recap, Investing.com’s Rate Hike Forecast & Inflation Scenario

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  • Gopinath cholayil @Gopinath cholayil
    what happens in Indian mkt tomorrow??
    Like 0

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