Continuing battle against inflation, RBI hikes repo rate by 35 bps

Chennai: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on Wednesday in a 5:1 decision increased the repo rate by 35 basis points (bps) to 6.25 per cent to contain inflation.

The repo rate, also called the policy rate, is the interest at which RBI lends money to the commercial banks.

The RBI Governor Shaktikanta Das, heading the MPC, announced the rate hike and added that the battle against inflation was not over.

With this the MPC has increased the repo rate by 225 points this fiscal.

Pegging the headline inflation at 6.7 per cent for this fiscal, the RBI has also estimated the gross domestic product (GDP) or the economic growth at 6.8 per cent this fiscal.

Das said the Indian economy was resilient and the inflation was moderate.

While the battle against inflation will continue, Das also said the aspect of economic growth will also be kept in mind.

The GDP growth of 6.8 per cent was resilient when the world was experiencing an acute slowdown.

The upward revision in the interest rate was in line with expectations of the economic experts and industry officials.

Reacting to rate hike K. Joseph Thomas, Head Research, Emkay Wealth told IANS: “The 35 bps hike in repo rate takes the base rate to 6.2 5 per cent. This will push the short term rates higher. In line with expectations but the overall stance looks relatively moderate compared to earlier policy pronouncements given the inflation outlook better.”

Persistence of inflation due to higher oil prices still remains a risk. Also, the weak Rupee may transmit some inflation into the domestic economy, he said.

He said 10 year benchmark yield may be in a broad range of 7.25 – 7.45 per cent, Thomas added.

“No real surprise with 35 bps indicating that the fight against inflation is not yet over but there is hope of downward trajectory. Therefore not 25 or 50 bps. Growth projections lower at 6.8 per cent and while magnitude is marginal indicates still resilience on balance,” Madan Sabnavis, Chief Economist, Bank of Baroda told IAN S.

“These are relevant observations given that the World Bank has scaled up projections just yesterday. Stance continues to be withdrawn which is relevant here as we are still in surplus though lower than three months back,” he added.

“There is assurance that RBI will provide liquidity when required as it tracks standing deposit facility (SDF) and variable rate reverse repo (VRRR) balances. On the whole, it is good for markets – Sensex up with announcement. GSec yields up marginally mirroring the rate hike,” Sabnavis remarked.IANS

Narrower-deficit forecast in Budget underscores govt’s long-term fiscal sustainability: Moody’s

New Delhi: Global ratings agency Moody's Investors Service said on Wednesday that the narrower fiscal deficit forecast in the Union Budget for 2023-24 underscores the government's commitment to longer-term fiscal...

EVs to get cheaper, Centre proposes Customs duty exemption on batteries

New Delhi: The Central government on Wednesday said that to further provide impetus to green mobility, Customs duty exemption is being extended to the import of capital goods and machinery...

Budget cuts MGNREGA allocation by 30% to Rs 61,032 crore for 2023-24

New Delhi:  The government has slashed the budgetary allocation for rural job guarantee scheme, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) by 30 per cent to Rs 61,032.65...

Mixed response to Budget 2023-24 at the bourses

Mumbai:  The Indian stock markets on Wednesday opened on a positive note and went up after Finance Minister Nirmala Sitharaman presented the Union Budget for FY24 but then came down....

New tax regime may not be necessarily beneficial for all taxpayers: Experts

New Delhi: The new tax regime (NTR) will now be considered as a default regime, but it may not necessarily be a better option for all the taxpayers, experts said....

Budget: BJP has cheated the people of Bihar again, says Tejaswi

  Patna: Bihar Deputy Chief Minister Tejashwi Yadav on Wednesday that the BJP has cheated the people of Bihar again through the Union Budget 2023-24. He also said that the...

‘Step-motherly treatment to Delhi yet again’: Kejriwal slams Budget

New Delhi: Delhiites have been meted out "step-motherly treatment yet again", Chief Minister Arvind Kejriwal said while reacting to the Union Budget 2023-24 presented by Finance Minister Nirmala Sitharaman on...

Insurance policies where premium is above Rs 5L no more tax exempt

  New Delhi: Insurance policies where the premium is over Rs 5 lakh will no longer be tax exempt, as per the provisions in the Union Budget 2023-24. Kapil Mehta,...

Economic growth to slide to 7% in 2022-23 against 8.7% in 2021-22: Fiscal policy statement

New Delhi : Economic growth is expected to slide in the current fiscal, even as India is among the bright spots in the prevailing global scenario marred by fluid geopolitical...

Budget 2023: Under pressure, a good balancing act

Diptendra Raychaudhuri New Delhi: It was expected to be a tough steer between the demands of the people who will decide the fate of Narendra Modi next year and the...

Govt announces Customs duty cuts on goods other than textiles, agriculture

New Delhi : Union Finance Minister Nirmala Sitharaman during her Budget speech on Wednesday proposed to reduce the number of Basic Customs Duty (BCD) rates on goods other than textiles...

Budget Relief: No tax for income up to Rs 7L in new tax regime

New Delhi : The income in personal income tax is expected to raise disposable incomes and transition the taxpayers to the new tax regime. Suman Chowdhury, Executive Director & Chief...

Read Previous

MCD polls: BJP, AAP win 14 wards each, Congress bags 2

Read Next

Christian Michel alleges abuse in Tihar Jail to UK PM

Leave a Reply

Your email address will not be published.

WP2Social Auto Publish Powered By :