The Reserve Bank of India (RBI) on Friday hiked the repo rate by 50 bps to 5.9 per cent, which is the highest in the past three years. This comes amid a fight against persistently high inflation. The repo rate is the rate at which the RBI lends short-term funds to banks, and banks normally pass it on to consumers as well.
During his speech, the governor said that the rates for the standing deposit facility (SDF) and the marginal standing facility (MSF) were also raised by 50 basis points to 5.65 per cent and 6.15 per cent, respectively.
The central bank decided to withdraw accommodative stance while supporting growth. He mentioned that the real GDP growth for FY23 is projected at 7 per cent.
Shaktikanta Das said, "World has been confronted with one crisis after another. It has witnessed two major shocks in last 2.5 years. Aggressive monetary policy action is the third shock in the world. India has withstood shock from coronavirus pandemic and the conflict in Ukraine."
Das said inflation was expected to remain elevated at around 6 per cent in the second half of this fiscal year, suggesting price pressures would remain higher for a longer period than previously expected. He said that inflation expected to remain elevated at 6.7 per cent for FY23. Recent correction in global crude oil prices if sustained may provide relief to inflation, he pointed out at the MPC meet.
He noted that merchandise exports have been affected because of external factors. High frequency data for Q2 indicates economic activities remain resilient and private consumptions are also picking up, he said.
The governor also spoke about the fall in the rupee's value.
Here is the full speech of the RBI Governor Shaktikanta Das.
The Reserve Bank of India tweeted explaining where and how to watch RBI MPC meet live. “Watch out for the Monetary Policy statement of the RBI Governor @DasShaktikanta at 10:00 AM on Sept 30, 2022,” the tweet said.
YouTube: You can watch the LIVE address of RBI governor Shaktikanta Das on YouTube in the given link.
Facebook: The address will be simultaneously streamed on Reserve Bank of India’s Facebook page.
Twitter: RBI Governor Shaktikanta Das’ address to the country will also be streamed on the Central Bank’s official Twitter handle @RBI. Das will also address a press conference post announcement at 12 pm. One can watch it live on YouTube at https://youtu.be/rhvk3V6zZV0