The Reserve Bank of India (RBI) increased the repo rate”>rate on Friday by 50 basis points to 5.90% to rein in increasing inflation. This move was made following the aggressive monetary policies of other central banks and the turbulent markets in most nations.
Today, RBI Governor Shaktikanta Das announced the rate increase.
At the beginning of the meeting of the Monetary Policy Committee (MPC) that took place on Wednesday, five of the seven members of the MPC voted in favor of increasing the primary lending rate, also known as the repo rate, by 50 basis points (bps).
Additionally, the rates for the standing deposit facility (SDF) and the marginal standing facility (MGF) were hiked by 50 basis points, bringing them to 5.65% and 6.155%, respectively.
To combat domestic retail inflation that has consistently been higher than the RBI’s upper tolerance level of 6% each month this year, the central bank has already raised the primary policy rate by 140 basis points (bps) since May, bringing it to a new all-time high of 5.4%.
The Monetary Policy Committee (MPC) is in charge of determining and maintaining the key interest rate in India. Within the committee, there are a total of six members: three members within RBI and three members from outside the organization.