Repo rate steady at 5.25%; RBI flags Hormuz disruptions, energy risks
India’s central bank has kept borrowing costs steady while signalling caution on global risks, even as domestic demand and services activity continue to support economic momentum.
India’s central bank has kept borrowing costs steady while signalling caution on global risks, even as domestic demand and services activity continue to support economic momentum.
Consequently, the standing deposit facility (SDF) rate remains at 5%, and the marginal standing facility (MSF) rate and the Bank Rate remain at 5.50%.
The Reserve Bank of India (RBI) released its bi-monthly monetary policy here on Friday after the Monetary Policy Committee (MPC)…
The RBI is likely to lower the repo rate by 25 basis points attributed to persistent downside surprises in headline Consumer Price Index inflation in its upcoming monetary policy committee meeting, Morgan Stanley in its latest report.
The MPC has also revised the average headline inflation for this year to 2.6 per cent from the earlier projection of 3.7 per cent in June and 3.1 per cent in August.
In its last three meetings in April, June, and August, the RBI kept the repo rate unchanged at 6.5 per cent.
The moderation in the country's retail inflation in April has validated the Reserve Bank of India's (RBI) decision to pause the repo rate in its first 2023 monetary policy meeting, according to SBI Research.
"As financial conditions tighten, global financial markets are experiencing surges of volatility, with sporadic sell-offs in equity and bond markets, and the US dollar strengthening to a 20-year high," the minutes said.
The 50 basis points hike in the repo rate coupled with inflationary pressure is likely to impact the sentiment of the Housing sector particularly in the affordable and mid-range housing segments.
As expected earlier, the Reserve Bank of India's Monetary Policy Committee (MPC) in a 5:1 decision increased the repo rate by 50 basis points to 5.90 on Friday. The RBI Governor Shaktikanta Das, heading the MPC, announced the hike to subdue the inflation.
