Read more
Progress made so far while closely monitoring domestic and global situations,” he said. This goes against a Reuters poll which said the RBI would hike its key interest rate by 25 basis points on April 6 and then pause for the rest of the year.
However, the RBI MPC has left the door open for future rate action. Shaktikanta Das said, ‘The MPC will not hesitate to increase the repo rate in future meetings.’ The central bank had already raised the repo rate by a total of 250 bps from May 2022 to control inflation, through which it remains above the RBI’s 6 per cent limit.
In the last monetary policy in February this year, the RBI increased the key repo rate by 25 basis points to 6.50 per cent. This was the sixth consecutive increase in the key policy rate since May 2022, during which the RBI MPC has increased the repo rate by 250 basis points. One basis point is equal to one hundredth of a percentage point.
The RBI is mandated to keep the CPI inflation rate at 4 percent with flexibility of 2 percent up or down. However, as per the latest data available, India’s CPI inflation for February 2023 stood at 6.44 per cent, which is above the RBI’s upper limit of 6 per cent for the second month in a row. The retail inflation in January 2023 was 6.52 per cent.
The World Bank on Tuesday revised its fiscal year 2023-24 GDP forecast to 6.3 per cent in December 2022 from 6.6 per cent in December 2022. Rising borrowing costs and slower income growth will weigh on private consumption growth, and government consumption is expected to slow further as fiscal support measures are rolled back related to the pandemic.
read all latest business news Here