RBI raises repo rate by 50 bps more to 5.9%

Current Affairs

  • The Reserve Bank of India (RBI) raised policy interest rates by half a point as expected and kept the door open for more increases to fight price pressures, saying it has enough in its arsenal to counter blows from monetary tightening by Western economies.
  • It cut India’s economic growth forecast amid the effects of tightening monetary conditions on demand, but retained inflation projections while warning that lower farm output could push prices higher.
  • The repo rate is the interest rate at which the central bank lends to commercial banks.
  • This is the RBI’s fourth rate hike in the current financial year. In its off-cycle monetary policy review in August, the RBI increased the repo rate by 50 basis points (bsp) to 5.4 per cent.

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