RBI Hikes Repo Rate By 50 BPS To 4.9 Percent, GDP Growth At 7.1

Earlier, in an off-cycle or unplanned meeting of the MPC or Monetary Policy Committee RBI ascended the repo rate by 40 bps to 4.40 per cent. Now, in this month’s scheduled meeting RBI has hiked repo rate by 50 bps taking the current figure to 4.90 per cent for, a second time. Repo rate are still below the pre-pandemic level mentions RBI Governor Shaktikanta Das as he pointed out that MPC’s decision is unanimous with the aim to recover the losses that occurred during Pandemic situations.

Repo Rate Hiked, GDP Growth Continued At 7.1 Percent

Repo Rate Hiked, GDP Growth Continued At 7.1 Percent

This increase was highly expected, this hike was not a surprise one, it was also declared by the RBI itself. A poll conducted by Bloomberg also suggested that the MPC will go for a hike of up to 50bps to 1 per cent as voted by the majority. The rest of the participants suggested that a 40 bps hike will be announced.

The announcement of an increase in repo rate and reverse repo rate previously can be seen in the loans and mortgages. Also, the largest public sector lender famous for home loans, HDFC Bank, has hiked its prime retail lending rates, due to which the home loans are benchmarked by 35 bps. Whereas, ICICI Bank has also ascended its Marginal Cost of Fund-Based Lending Rate or MCLR, (means the rate below which the bank cannot sanction a loan) by 30 bps.

Other Essential Points Announced By RBI Governor

E-Mandate Limit Hiked For Cards

  • With the latest announcement, RBI also has increased the e-mandate limit on cards and Prepaid Payment Instruments or PPIs to 15,000 from the present 5,000.

Credit Cards And UPI To Be Linked

  • Credit Cards can be linked with Unified Payments Interface or UPI, says the Governor.

Repo Rate Below Pre Pandemic Level

  • Governor also mentioned that the repo rate are still below the Pre-COVID level. The government will take more precautionary measures to keep it descending.

Inflation Is Elevated

  • RBI has forecasted a CPI inflation rate of 6.7 per cent for FY23 from the previous figure of 5.7 per cent. Governor also said, “Our steps will be calibrated, focussed on bringing down inflation to the target level.”

Also read:

RBI Clarifies There Is “No change in existing Currency and Banknotes”

MSF And Bank Rates

  • The Central Bank has increased the MSF rate and Bank rates to 5.15 per cent from 4.65 per cent, as announced by the Governor.

War Effects

  • The RBI Governor said, “The Ukraine war has led to the globalisation of inflation. During the challenging times, the Indian economy has remained resilient. The MPC noted that inflation risk has intensified further.”

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Rishabh Sharma

Rishabh is an experienced content writer and editor, he is working for Viralbake to cover a diversified range of categories. His articles mainly focus on providing information, being a travel guide, educating others, and also making people aware of technology, after all, he is a technophile. When not writing he can be found gaming, watching movies, and travelling.

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