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RBI MPC Unanimously Votes For 25-Bps Repo Rate Hike
The RBI MPC unanimously voted for a 25-basis-point repo rate hike to 5.50% to combat rising inflation.
Key points
- The RBI raised the benchmark policy rate to 5.50% on October 7, the first hike in nearly four years.
- The MPC shifted its monetary policy stance to calibrated tightening, signaling that near-term rate cuts are off the table.
- RBI Governor Sanjay Malhotra noted that 37% of commodities recorded inflation above 4% in August.
Why it matters. The shift to calibrated tightening and the rate hike indicate that future policy actions will likely only involve further hikes or pauses depending on economic conditions.
The Reserve Bank of India’s Monetary Policy Committee unanimously voted for a 25-basis-point repo rate hike to 5.50% on October 7. According to meeting minutes released Wednesday, the decision was driven by rising inflation, currency depreciation, and elevated food and crude oil prices. RBI Governor Sanjay Malhotra stated that the policy stance has shifted to calibrated tightening, meaning near-term rate cuts are off the table.
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RBI MPC Unanimously Votes For 25-Bps Repo Rate Hike
The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India voted unanimously for a 25-basis-point hike in the repo rate. Minutes released on Wednesday indicate the decision was driven by rising inflation and price pressures across various goods. RBI Governor Sanjay Malhotra stated that the duration and extent of the hiking cycle will depend on actual growth and inflation developments. The move aims to stabilize the economic outlook amid persistent price volatility.