BREAKING: RBI Monetary Policy -- Bad news for loan borrowers, RBI hikes repo rates by 50 basis points to 5.40%

New Delhi: In a move that will raise borrowing costs for corporates and individuals even further, the RBI Monetary Policy Committee led by Governor Shaktikanta Das hiked Repo Rate by by 50 basis points to 5.40 percent on Friday.

Repo is the rate at which Reserve Bank of India lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. This is the third hike since the beginning of the current financial year, taking the rate is back to pre-pandemic levels in order to tame the inflationary pressure.

The real GDP growth projection for 2022-23 is retained at 7.2 percent  with Q1- 16.2 percent , Q2- 6.2 percent , Q3 -4.1 percent  and Q4- 4 percent  with risks broadly balanced. The real GDP growth for Q1 2023-24 is projected at 6.7 percent, RBI Governor Shaktikanta Das addressing a press conference said.

Das also highlighted tht consumer price inflation remains uncomfortably high while stating that inflation is expected to remain above 6 percent.

The six-member Monetary Policy Committee headed by Reserve Bank of India Governor Shaktikanta Das started deliberations on the bi-monthly policy review on Wednesday.