RBI Monetary Policy: Reserve Bank of India hikes repo rate to 6.5%; Know highlights from Governor's address

The Reserve Bank of India Governor Shaktikanta Das announced the Monetary Policy Statement on Wednesday, February 8, 2023, raising the repo rate by 25 basis points to 6.5 per cent. The central bank lifted the key benchmark interest rate by 35 basis points in its December monetary policy review. The Reserve Bank has raised the short-term lending rate by 225 basis points since May of last year to contain inflation. Governor Shaktikanta Das announced the monetary policy committee's decision, which was approved by a vote of 4 out of 6 members. 

Here are highlights from Governor's address:
1) Rate hike of 25 basis points considered reasonable at this time
2) FY24 CPI inflation is expected to be 5.3 per cent
3) Monetary policy will be designed to ensure a long-term deflationary approach
4) July-September 2023 GDP growth is expected to be 6.2 per cent, up from 5.9 per cent previously
5) The stickiness of core inflation is a source of concern
6) The future growth in systemic liquidity will be moderated by TLTRO and LTRO maturities
7) The current account deficit improved in the third quarter after increasing in H1
8) Since July, FPI inflows have shown signs of improvement
9) By international standards, India's external debt ratios are low
10) RBI intends to expand the UPI facility for merchant payments to inbound travellers, beginning with those from G20 countries
11) To broaden the scope of the TEeDS platform to aid MSMEs in improving their cashflows
12) To launch a pilot project in 12 cities in which a machine will vend coins based on QR codes

Also Read: RBI Monetary Policy Updates: Governor Shaktikanta Das announces MPC statement; Repo rate hiked by 25 bps

Also Read: Adani vs Hindenburg row: Banking sector resilient and stable, says RBI

Also Read: Centre, RBI in discussion with South Asian countries for cross-border rupee trade: Shaktikanta Das

• Governor Shaktikanta Das
• RBI
• Reserve Bank of India