Business
RBI raises repo rate by 25 bps to 5.50%
The Indian Express··5d ago
The Reserve Bank of India's Monetary Policy Committee raised the repo rate by 25 basis points to 5.50% on Wednesday. Governor Sanjay Malhotra said near-term policy can only be a hike or a pause. The MPC shifted its stance from neutral to calibrated tightening. Headline CPI inflation is expected to average almost 5.8% over the next three quarters.
Prism
What It Means For You
- Borrowers face higher lending rates if banks pass through the 25 bps repo increase.
- Malhotra said another hike or a pause depends on evolving inflation and growth data.
- Core inflation is projected at 4.4 percent this financial year, the Governor said.
What's Happening
- The MPC unanimously voted to increase the policy repo rate by 25 basis points.
- Malhotra said recalibrating the policy rate is imperative given the inflation outlook.
- He flagged deficient southwest monsoon, El Niño conditions and oil price volatility.
What The MPC Signalled
- The committee moved from a neutral stance to calibrated tightening after the hike.
- Malhotra said inflation and its outlook are not as benign as they were last year.
- Analysts said the December review could bring another hike depending on conditions.
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