RBI Monetary Policy: increases repo rate by 50 bps to 5.4%

New Delhi: The Governor of the Reserve Bank of India Shri Shaktikanta Das on Friday announced the Decisions and Deliberations of the Monetary Policy Committee (MPC). 

The committee (MPC) met from August 3 to 5 and reviewed the macroeconomic situation and its outlook. However it was decided to increase the policy repo rate by 50 basis points to 5.4 percent, with immediate effect, Governor Shri Das said in his statement. 

Consequently, the standing deposit facility (SDF) rate stands adjusted to 5.15 percent; the marginal standing facility (MSF) rate, and the Bank Rate to 5.65 percent. The MPC also decided to remain focused on the withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth.

Das said the MPC noted that domestic economic activity is resilient and progressing broadly along the lines of the June resolution of the MPC. Consumer price inflation has eased from its surge in April but remains uncomfortably high and above the upper threshold of the target. Consumer price inflation has eased from its surge in April but remains uncomfortably high and above the upper threshold of the target. 

Taking all these factors into consideration, the real GDP growth projection for 2022-23 is retained at 7.2 percent, with Q1 at 16.2 percent; Q2 at 6.2 percent; Q3 at 4.1 percent; and Q4 at 4.0 percent, with risks broadly balanced. Real GDP growth for Q1:2023-24 is projected at 6.7 percent.