RBI Governor Shaktikanta Das said the Indian economy remains resilient. Real GDP growth for 2023-24 is projected at 6.4%, with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% and Q4 at 5.8%.
RBI Increases Repo Rate
The decision of increasing the repo rate by 25 bps was taken after the monetary policy committee took the decision with a majority of 4 members of 6 members. The repo rate has been increased to 6.50 percent after applying the changes.
Projected GDP Growth for FY 2023-24
Projected GDP Growth FY 2023-24 |
|
Q1 | 6.4% |
Q2 | 7.8% |
Q3 | 6.2% |
Q4 | 5.8% |
Previous changes in Repo Rate
The rates were last increased by the end of the year 2022. On Dec 2022, the repo rates were increased by 0.35 percent to 6.25 percent.
The Standing Deposit Facility rate will be revised to 6.25% and the Marginal Standing Facility rate and Bank Rate to 6.75%. The MPC also, by a majority of 4 out of 6, decided to focus on the return of housing to ensure that inflation remains within the target and continues to support growth.
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Impact on Debt and Equity
Unless there is an unexpected spike in inflation, we would expect the Reserve Bank of India to keep the policy rate unchanged for the remainder of 2023. This will be positive for both debt and equity markets,” said Sujan Hazra, chief economist and executive director, Anand Rathi Share & Stock Brokers.
The stock prices also hiked to some extent after the increase in repo rate. Here are a few posts from social platforms that show how people reacted to the initiative:
Your loan EMIs may now go up as the Monetary Policy Committee (MPC) of the RBI has just increased the repo rate by 25 bps.#rbipolicy #RepoRate#MPC#repo #BreakingNews #personalfinance pic.twitter.com/HzeslNxVSr
— BankBazaar (@BankBazaar) February 8, 2023
Middle class:- Why #RepoRate increased again, now we need to pay more EMI every month.
Godi :- Then how we will save badani, our banks need more money to give him more loans.#rbipolicy #RepoRate 👎— Satish bokka (@Satishb56353331) February 8, 2023
RBI hikes repo rate by 25 bps to 6.50%
The Monetary Policy Committee (MPC) increased the repo rate, or the key rate at which the RBI lends short-term funds to commercial banks, to 6.50% from 6.25%.#rbipolicy #RepoRate #RBIMPC #rbipolicy #StocksToBuy #MPC #RBI #monetaryPolicy
— Mohit Munjal (@MunjalMohit9870) February 8, 2023