RBI hiked its key repo rate by 25 basis points on Wednesday as expected but surprised markets by leaving the door open to more tightening, saying core inflation remained high.
Governor Shaktikanta Das announced the decision of the monetary policy committee which was passed by a majority of 4 members of 6 members. This was the first Monetary Policy Statement of the year. In December 2022, the repo rate was raised by 0.35 percentage points to 6.25%. There was no change in the reverse repo rate of 3.35%.
The real GDP growth for 2023-24 is projected at 6.4% with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% & Q4 at 5.8%.
Indian economy remains resilient, RBI Governor Shaktikanta Das said adding that the real GDP growth is estimated at 7% in 2023-23.
“Looking ahead while inflation is expected to moderate in 2023-24, it is likely to roll above the 4% target. The outlook is clouded by continuing uncertainties from geopolitical tensions, global financial market volatility, rising non-oil commodity prices and volatile crude oil prices,” Das said.
This is the sixth time the repo rate has been hiked by the Reserve Bank of India since May last year, taking the total hike to 250 basis points with the latest increase.