RBI MPC Meet Concludes Today - From Repo Rate Hike to GDP Projection; Here are 5 Key Takeaways

New Delhi: Reserve Bank of India (RBI) in the first meeting of the Monetary Policy Committee (MPC) in 2023 has decided to hike Repo rate by 25 bps to 6.50% with immediate effect. The MPC took the decision after four members supported the repo rate hike while two members voted against it. MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

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RBI MPC Meet Outcome – 5 Key Takeaways

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• RBI MPC voted in favour of hiking Repo rate by 25 basis points to 6.50 %. The decision was voted in favour of 4:2.
• RBI keeps the standing deposit facility (SDF) rate adjusted to 6.25 % and the marginal standing facility (MSF) rate and the Bank Rate to 6.75 %.
• RBI Expects India’s Real Gross Domestic Product (GDP) growth to be at 7.0 % year-on-year for 2022-23, driven by private consumption and investment.
• CPI headline inflation moderated to 5.7 % in December 2022 – on the back of double digit deflation in vegetable prices.
• RBI projects Inflation at 6.5 % in 2022-23 and that will be decrease further at 5.4 % in Q4. RBI projects real GDP growth for 2023-24 at 6.4 % with Q1 at 7.8 %, Q2 at 6.2 %, Q3 at 6.0 % and Q4 at 5.8 %.

RBI had increased the Repo rate by 35 bps in the last meeting in Decemebr, 2022 after increasing 50 bps for three consecutive times.