Mumbai: The policy repo rate was increased by the Reserve Bank of India (RBI) today by 35 basis points to 6.25%, marking the sixth consecutive increase. The benchmark rate has increased by a total of 190 basis points: three times by 50 basis points since June and once by 40 basis points in an off-cycle meeting in May. As long as inflation remains above its tolerance level, the central bank raised the rate.
In making the Monetary Policy Committee (MPC) pronouncements, Governor Shaktikanta Das stated that the real GDP prediction for FY23 had been reduced to 6.8%, which is 0.1% lower than the updated estimates made public by the World Bank yesterday. The RBI has also kept its 6.7% estimate for the Consumer Price Index (CPI) inflation rate for FY23. According to Shaktikanta Das, as the winter harvest is received, inflation should start to decline.
He added that the RBI is prepared to carry out liquidity injection operations but will wait for enduring indicators of a change in the liquidity cycle. He claimed that although the rupee is resilient and stable, attention must be paid to a systematic assessment of the currency rate. He said that the currency reserves had increased by USD 36.7 billion.