Shaktikanta Das was reacting to the decision of the RBI Monetary Policy Committee to hike the policy repo rate
Mumbai (Maharashtra):
Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said a hike in policy rates by 50 basis points or 0.50 per cent has become a new normal for central banks across the world.
Mr Das was reacting to the decision of the RBI Monetary Policy Committee (MPC) to increase the policy repo rate by 0.50 per cent.
“If you look around, 50 basis points has become the new normal and a large number of central banks are now raising 75 to 100 basis points,” Mr Das said on the back of the 50 basis points hike in policy rates by the RBI. Explaining the logic. ,
The RBI governor said other central banks have been more aggressive than the RBI in increasing policy rates.
“There is a trend that 75 to 100 bps will take 50 basis points. But at RBI, we take a very calibrated and measured approach. We look at the growth aspect and the impact of rate action on our consumer urban and rural. Demand. Based on that we have taken a balanced decision. Based on the prevailing and expected inflation-growth dynamics,” Mr. Das said.
The Monetary Policy Committee, held during August 3-5, unanimously decided to increase the policy repo rate by 50 basis points to 5.4 per cent with immediate effect.
Consequently, the Fixed Deposit Facility (SDF) rate has been adjusted to 5.15 per cent; and marginal standing facility (MSF) rate and bank rate of 5.65 per cent. The MPC also decided to focus on the return of housing to ensure that inflation remains within the target while supporting growth going forward.
These decisions are in line with the objective of achieving the medium-term target for Consumer Price Index (CPI) inflation of 4 per cent within a band of /- 2 per cent, while supporting growth, according to the Monetary Policy Statement, 2022. Huh. 23 Resolution of the Monetary Policy Committee (MPC).
“We, at RBI, reiterate our commitment to maintain price and financial stability to keep our economy on a sustainable path of growth. Our actions have helped the economy tide over a series of setbacks over the past two and a half years. We have seized our role at this critical juncture and will continue in our efforts to ensure a safe and soft landing,” the RBI governor said after the conclusion of the MPC meeting.
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