RBI’s Monetary Policy Committee (MPC) Increases Repo Rate By 50 bps To 4.90%
Apart from increasing repo rate by 50 basis points to 4.9%, the RBI also said projected inflation for this fiscal year is 6.7% and projected real GDP growth stays at 7.2%.
Repo rate increased
The policy repo rate was raised 50 basis points to 4.90 percent with immediate effect, as expected. As a result, the standing deposit facility (SDF) rate has been changed to 4.65 percent, while the marginal standing facility (MSF) rate has been adjusted to 5.15 percent, and the Bank Rate has been adjusted to 5.15 percent.
Inflation expected to remain high
RBI has increased FY23 consumer price index (CPI) inflation forecast to 6.7 percent from 5.7 percent. Inflation is likely to remain above 6 percent in the first three quarters of the current fiscal. Governor Shaktikanta Das said that the RBI’s steps would be “calibrated, focussed on bringing down inflation to target level”.
UPI linked to RuPay Credit Cards
Governor Shaktikanta Das stated during the announcement of the RBI Monetary Policy Meeting that UPI had become the most inclusive means of payment in India, with over 26 crore unique users and 5 crore merchants on board. In May alone, UPI processed 594.63 crore transactions worth ₹10.40 lakh crore. It is proposed that credit cards be linked to UPI in order to expand its reach and usage. To begin, Rupay credit cards will be able to use this feature.
Mr. Ashwani Kumar Rana, Founder, Voice of Banking says with the again increase in the repo rate by 50 basis points, the bank customers taking loans have once again got a setback.
The Reserve Bank has again increased the repo rate by 50 basis points today after a month. After this increase, the repo rate will be 4.90. To control inflation, earlier on May 4, the repo rate was increased by 40 basis points and the CRR was increased by 50 basis points.
Due to this, banks had increased the interest rate on loans, due to this increase the interest rate on fixed deposits has also been increased. Same time benefit of which will be available to the customers making fixed deposits. While this increase will try to control inflation on the one hand, it will also have an impact on the loan installment of customers taking loans from banks.
