Reserve Bank of India increased the repo rate by 35 basis points (bps) to 6.25%.

  • On 7 December 2022, The Monetary Policy Committee (MPC) of Reserve Bank of India (RBI) decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 35 basis points to 6.25% with immediate effect.
  • Consequently, the standing deposit facility (SDF) rate stands adjusted to 6.00% and the marginal standing facility (MSF) rate and the Bank Rate to 6.50%.
  • The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.
  • Further, RBI also lowered the GDP forecast for the financial year 2022-23 to 6.8% from an estimate of 7%.

What is Repo Rate?

The rate at which the RBI lends money to banks to meet their short-term funding needs. The repo rate is used by the monetary authorities to control inflation.

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