RBI hikes repo rate by 40 basis points in emergency meet

26 Mar 2024 , 03:13 PM

RBI Governor Shaktikanta Das said that the Monetary Policy Committee (MPC) of the Reserve Bank of India in an off-cycle meeting held between May 2-4 hiked the repo rate by 40 basis points (bps) to 4.40 per cent with immediate effect in a bid to contain inflation. The RBI on Wednesday hiked rates for the first time since August 1, 2018.

Consequently, the standing deposit facility (SDF) rate stands adjusted to 4.15 per cent while the marginal standing facility (MSF) rate and the Bank Rate to 4.65 per cent, the RBI governor said.

The RBI also hiked the cash reserve ratio (CRR) by 50 basis points to 4.5% effective May 21.

Further, RBI Governor Das also announced that the monetary policy still remains accommodative and careful. Calibrated withdrawal of pandemic-related measures will be undertaken by the central bank.

The MPC held an off-cycle meeting on May 2 and May 4 to reassess the evolving inflation-growth dynamics and the impact of the developments after the MPC meeting of April 6-8.

The MPC believes the core inflation is likely to remain elevated in the coming months, reflecting high domestic pump prices and pressures from the prices of essential medicines.