NEW DELHI: The Reserve Bank of India’s financial coverage committee (MPC) on Thursday stored the repo fee unchanged at 6.5%, RBI Governor Shaktikanta Das stated.
Repo fee is the speed at which the RBI lends to different banks.
This was once the primary assembly of the RBI’s MPC within the new monetary yr.
Bid to tame inflation
The central financial institution has already higher repo fee by way of a complete of 250 foundation issues since May in a bid to include inflation, even though it has persevered to stay above the RBI’s convenience zone of 6 in step with cent more often than not.
Having remained underneath six in step with cent for 2 months (November and December 2022), the retail inflation breached the RBI’s convenience zone in January, warranting motion by way of the central financial institution.
The Consumer Price Index (CPI)-based inflation was once 6.52 in step with cent in January and six.44 in step with cent in February.
Raising rates of interest is a financial coverage software that generally is helping suppress call for within the economic system, thereby serving to the inflation fee decline.
The RBI has been tasked to make certain that retail inflation stays at 4 in step with cent with a margin of +/- 2 in step with cent. However, it didn’t stay the inflation fee underneath six in step with cent for 3 consecutive quarters starting January 2022.
The MPC is composed of 3 RBI officers and 3 exterior individuals appointed by way of the central executive.
The exterior individuals are Shashanka Bhide (Honorary Senior Advisor, National Council of Applied Economic Research, Delhi); Ashima Goyal (Emeritus Professor, Indira Gandhi Institute of Development Research, Mumbai); and Jayanth R Varma (Professor, Indian Institute of Management, Ahmedabad).
(With inputs from businesses)
Repo fee is the speed at which the RBI lends to different banks.
This was once the primary assembly of the RBI’s MPC within the new monetary yr.
Bid to tame inflation
The central financial institution has already higher repo fee by way of a complete of 250 foundation issues since May in a bid to include inflation, even though it has persevered to stay above the RBI’s convenience zone of 6 in step with cent more often than not.
Having remained underneath six in step with cent for 2 months (November and December 2022), the retail inflation breached the RBI’s convenience zone in January, warranting motion by way of the central financial institution.
The Consumer Price Index (CPI)-based inflation was once 6.52 in step with cent in January and six.44 in step with cent in February.
Raising rates of interest is a financial coverage software that generally is helping suppress call for within the economic system, thereby serving to the inflation fee decline.
The RBI has been tasked to make certain that retail inflation stays at 4 in step with cent with a margin of +/- 2 in step with cent. However, it didn’t stay the inflation fee underneath six in step with cent for 3 consecutive quarters starting January 2022.
The MPC is composed of 3 RBI officers and 3 exterior individuals appointed by way of the central executive.
The exterior individuals are Shashanka Bhide (Honorary Senior Advisor, National Council of Applied Economic Research, Delhi); Ashima Goyal (Emeritus Professor, Indira Gandhi Institute of Development Research, Mumbai); and Jayanth R Varma (Professor, Indian Institute of Management, Ahmedabad).
(With inputs from businesses)