oppn parties RBI Goes For One More Hike In FY 23

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  • Delhi chief minister Arvind Kejriwal, referring to a spate of FIRs for putting up posters in Delhi which said "Modi Hatao, Desh Bachao", said that even the British did not act in such manner
  • The 2023-24 Appropriation BIll, which allows the government to spend Rs 45 lakh crore in the fiscal, was passed by Lok Sabha in 9 minutes without any discussion
  • Sources say that Amritpal Singh fled to Haryana and may now be in Uttarakhand
  • Experts say that Rahul Gandhi's disqualification from Parliament will kick in immediately as the conviction has not been stayed
  • Tatas to invest $2bn in super app Tata Neu
  • Chief Economic Advisor V Anantha Nageswaran has said that inflation will drop as commodity and food prices have fallen
  • Government will define quality norms to ensure better 5G service
  • Stocks tumble again on Thursday after two sessions of recovery: Sensex loses 289 points to 57925 and Nifty goes down by 75 points to 17076
  • Amicus curiae and senior advocate K V Vishwanathan has told the Supreme Court that the changes made in law and three extensions given to the present director of Enforcement Directorate are illegal and will imperil the integrity of the agency
  • Supreme Court says it cannot judicially direct the government to acquire land or buildings near the court for advocates' chambers
  • ISSF Cup shooting: Indian pair of Rhythm Sangwan and Varun Tomar win silver in 10m sir rifle mixed team event
  • WPL: UP Warriorz take on Mumbai Indians in the Eliminator today. The winner will play Delhi Capitals in the finals
  • World Boxing: Four Indians - Nikhat Zareen, Nitu Ghanghas, Lovelina Borgohain and Saweety Boora - enter the frinals in their respective category
  • Bombay HC imposes costs and dismisses a petition by a housing society that sought to have a community-wise cap on residents
  • Delhi Police files 159 FIRs for defacement of public property and 49 for posters saying 'Modi Hatao Desh Bachao'
Rahul Gandhi disqualified from Parliament, Wayanad Lok Sabha seat declared vacant
oppn parties
RBI Goes For One More Hike In FY 23

By A Special Correspondent
First publised on 2023-02-08 07:33:14

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) hiked the repo rate by 25 basis points in a 4:2 decision. It retained its stance of withdrawing accommodation. The standing deposit facility rate will stand revised to 6.25% and the marginal standing facility rate and the bank rate to 6.75%.RBI governor Shaktikanta Das said that hiking of rate was necessary at this juncture as inflation is still high. RBI projected GDP growth at 6.4% in the current fiscal. Das also said that the outlook for the global economy does not look as grim as even some months back.

With inflation below the upper threshold of the RBI band for two consecutive months and with dissent within the MPC, it was being expected that the committee will pause rate hikes for now. But as Das said, although food inflation has gone down, core inflation still remains sticky. Since the MPC was criticized for not being ahead of the inflation curve initially and starting the rate hikes very late, it has chosen to play safe by hiking the rate by 25 basis points in the last review meet of FY 23.

The RBI has hiked the repo rate by a cumulative 250 basis points from 4% in May 2022 to 6.5% now. This was in keeping with the trend worldwide as central banks geared up to fight runaway inflation due to supply chain disruptions due to Covid and the war in Ukraine. But with inflation easing globally, all central banks have indicated that they will go slow in hiking rates. Consequently, the RBI has also slowed down - from 50 basis points in the early stages to 35 basis points in December 2022 to 25 basis points now. But given the fact that the budget has allocated massive funds for infrastructure development and the government expects private investment to follow, any more rate hikes will dampen the enthusiasm. Hence, if inflation remains under control, the RBI should now pause the rate hikes.