RBI:In an effort to control inflation, which has been above its acceptable level for the past 11 months, the Reserve Bank of India (RBI), through its Monetary Policy Committee (MPC) announced on Wednesday that it had increased the benchmark lending rate by 35 basis points to 6.25 percent.
RBI retains consumer retail inflation at 6.7 percent
Since January this year, retail inflation has exceeded the Reserve Bank of India’s comfort zone of 6 percent, and as a result of the war between Russia and Ukraine, inflation has remained high and widespread globally. The Indian economy, on the other hand, has stayed resilient and is viewed as a bright spot in a world that is going through stagnation and conflict.
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The CPI inflation rate that the RBI forecasts for April – June 2023 will remain at 5.0 percent, while the CPI inflation rate for July – September 2023 is predicted to be 5.4 percent.
Following the most recent hike, the repo rate, often known as the short-term lending rate, which banks borrow from the central bank, has crossed 6%. This is the fifth consecutive rate hike after a 40 basis points hike each in June, August and September. The RBI has raised the benchmark rate by 2.25 percent since May this year.
The RBI has also slashed its GDP growth forecast to 6.8 percent from an earlier estimate of 7 percent for the current fiscal year.
On account of geopolitical strife and aggressive monetary policy tightening globally, the RBI had slashed the economic growth projection for the current financial year to 7 percent from 7.2 percent in its last bi – monthly Monetary Policy Committee (MPC) review meeting.
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