NEW DELHI: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) raised the policy rates by 50 basis points (bps) on June 8, following the inter-meeting hike of 40bps in May. This has brought the repo rate to 4.90%. The back-to-back hikes signal that inflation has been reinstated as the primary focus, amid recovering growth and tightening financial conditions globally.
"The Monetary Policy Committee (MPC) of the Reserve Bank of India continued to speed up tightening. There is a a total increase of 90 bps inside a month — after the 40 bps hike on May 4. Yet the repo rate remains 25 bps below the February 2020, or pre-pandemic, level of 5.15%. A sharp rise in inflation outlook is forcing Mint Road’s hand," said Dharmakirti Joshi, Chief Economist, Crisil.
