The Reserve Bank of India’s Monetary Policy Committee, led by RBI Governor Shaktikanta Das, unanimously hiked the repo rate by 50 basis points to 4.90%. The latest policy rate rise follows the central bank’s announcement of a 40 basis point increase in the repo rate in off-cycle policy action in May.
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The following are the top ten highlights of RBI Governor Shaktikanta Das’ speech:
1. The rates on the Standing Deposit Facility and the Marginal Standing Facility have been hiked by 50 basis points. The rate on the Standing Deposit Facility is now 4.65%, while the rate on the Marginal Standing Facility is now 5.15%.
2. The MPC agreed unanimously to keep the focus on the withdrawal of accommodation in order to keep inflation within target in the future.
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3. GDP growth is expected to remain at 7.2% in FY23. For April-June, GDP growth is expected to be 16.2%, 6.2% from July to September, 4.1% from October to December and 4.0% from January to March.
4. CPI inflation projection for FY23 increased to 6.7% from 5.7%, according to RBI Governor Shaktikanta Das. The RBI’s inflation projection is based on a regular monsoon and a crude basket price of $105 per barrel.
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5. The RBI will provide enough liquidity in the banking system while normalising pandemic-related steps.
6. The RBI is keeping a tight watch on the government securities market. The central bank will take the appropriate measures as needed.
7. India’s foreign exchange reserves were $601.1 billion as of June 3, 2022.
8. Individual house loan limits set by urban and rural cooperative banks are being revised more than 100% higher to reflect the surge in housing values over the previous decade.
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9. To simplify transactions such as subscriptions, the cap on recurring e-payments has been increased from Rs 5,000 to Rs 15,000.
10. Credit cards may now be connected to UPI, beginning with RuPay credit cards.