Mumbai: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) decided to raise the key benchmark interest rate by 25 basis points to 6.5 percent on February 8.
Four out of 6 members of Monetary Policy Committee have decided to go ahead with this hike in the repo rate, RBI Governor Shaktikanta Das said on Wednesday.
The Monetary Policy Committee (MPC), led by Shaktikanta Das, began its three-day meeting on February 6 in the midst of the rate hike frenzy that began in May of last year to combat inflation.
With retail inflation showing signs of easing and continuing below the Reserve Bank of India's upper tolerance level of 6%, as well as a projected slowdown in GDP growth in the upcoming fiscal year beginning in April, experts believe the central bank may only choose to raise the benchmark interest rate by 25 basis points.
The central bank increased the key benchmark interest rate (repo) by 35 basis points (bps) in its review of the country's monetary policy in December, following three consecutive rises of 50 bps.
The RBI has raised the short-term lending rate by 225 basis points since May of last year in an effort to rein in inflation, which is primarily the result of external causes, particularly the disruption of the global supply chain caused by the commencement of the Russia-Ukraine war.
With this, RBI has increased the short-term lending rate by 250 basis points since May last year to contain inflation, mostly driven by external factors, especially global supply chain disruption, following the Russia-Ukraine war outbreak.
RBI MPC Live: Key Things to watch out for in the governor's speech
