Finance Minister Nirmala Sitharaman said that the hike in the repo rate is not a surprise
Mumbai (Maharashtra):
Finance Minister Nirmala Sitharaman on Saturday said the Reserve Bank of India’s (RBI) recent decision to hike key policy interest rates is a part of a synchronized program by central banks globally.
Addressing an event organized by a media group, Ms Sitharaman said the RBI’s decision to hike policy rates has not taken the government by surprise.
“It (rate hike) came as a surprise as it came between two monetary policy reviews,” he said.
On May 4, the RBI had increased the policy repo rate by 40 basis points to 4.40 per cent. The central bank also announced an increase in the cash reserve ratio (CRR) to 0.50 per cent.
The decision was taken at an unscheduled meeting of RBI’s Monetary Policy Committee (MPC).
The MPC decided to hold an off-cycle meeting on May 2 and 4, 2022 to re-evaluate the evolving inflation-growth dynamics and the impact of growth after the MPC meeting of April 6-8, 2022, RBI Governor Shaktikanta Das said. Was. Rate hike announced
“Based on this assessment of the macroeconomic situation and outlook, the MPC unanimously voted to increase the policy repo rate by 40 basis points to 4.40 per cent with immediate effect,” Mr Das said. Repo rate is the interest rate at which RBI lends short-term money to banks.
The Permanent Deposit Facility (SDF) rate has been adjusted at 4.15 per cent and the Marginal Standing Facility (MSF) rate and Bank Rate at 4.65 per cent.