The Reserve Bank increased the repo rate by 0.25 percent to 6.5 percent, increased the growth rate

Mumbai The Reserve Bank of India (RBI) raised the repo policy rate again by 0.25 percent in its bi-monthly monetary policy review on Wednesday, mainly to control inflation. Because of this, the main policy rate has risen to 6.50 percent. Along with this, the central bank has raised the estimate of the growth rate of the Gross Domestic Product (GDP) for the current financial year 2022-23 from 6.8 percent to 7 percent. At the same time, it has been estimated that the GDP (Gross Domestic Product) growth rate will be 6.4 percent in the coming fiscal year. The RBI has projected retail inflation of 6.5 percent in the current fiscal year and 5.3 percent in the next fiscal year.

The repo rate is the interest rate at which commercial banks borrow from the central bank to meet their immediate needs. An increase in this means that borrowing from banks and financial institutions will become more expensive and the monthly fee (EMI) on the existing loan will increase. Giving information on the decision taken at the three-day meeting of the Monetary Policy Committee (MPC), which began on Monday, RBI Governor Shaktikanta Das said in a digitally broadcast statement: “Given the current economic situation , the MPC decided to reduce the policy rate repo rate “It has decided to increase it from 0.25 percent to 6.50 percent.” He said that out of six members of the Monetary Policy Committee, four voted in favor of raising the repo rate.

However, this pace of the repo rate increase is less than the previous five increases and was expected by the market. RBI has increased the repo rate by 2.50 percent in total six times since May this year, mainly to control inflation. Previously, the repo rate was increased by 0.40 percent in May and 0.50 percent each in June, August and September and 0.35 percent in December. The central bank mainly looks at retail inflation when deciding the policy rate.

Disclaimer:Prabhasakshi has not edited this news. This news has been published from PTI-language feed.