07-12-2022 : In the consecutive fifth hike this year, the RBI’s Monetary Policy Committee has raised the repo rate by 35 basis points (bps) to 6.25 per cent. The decision of the Reserve Bank of India (RBI) Governor Shaktikanta Das headed six-member Monetary Policy Committee (MPC) has been announced.

In the consecutive fifth hike this year, the RBI’s Monetary Policy Committee has raised the repo rate by 35 basis points (bps) to 6.25 per cent with immediate effect, making loans expensive. The policy rate is now at the highest level since August 2018. The RBI has maintained policy stance at ‘withdrawal of accommodation’.

RBI Repo Rate: Consequently, the various rates are as under

Policy Repo Rate: 6.25% (Changed)

Standing Deposit Facility (SDF): 6.00% (Changed)

Marginal Standing Facility Rate: 6.50% (Changed)

Bank Rate: 6.50% (Changed)

Fixed Reverse Repo Rate: 3.35%

Cash Reserve Ratio (CRR): 4.50%

Statutory Liquidity Ratio (SLR): 18.00%

RBI has maintained the consumer price index (CPI) inflation forecast for FY23 at 6.7%. The real FY23 GDP forecast lowered to 6.8% from 7%. Inflation is expected to be above 4% in the next 12 months.

Standing Deposit Facility rate, Marginal Standing Facility rate also increased by 35 basis points each to 6% and 6.5%

India’s retail inflation fell to a three-month low of 6.77% in October, down from 7.41% in September. However, remained above the RBI’s tolerance band for the 10th consecutive row. Equities open flat with a negative bias as Sensex dips over 55 points, Nifty falls 0.2% ahead of RBI’s policy decision. Liquidity conditions are set to improve. The weighted average lending rate is up 117 bps in May-October.