RBI hiked repo rate today owing to inflationary pressures
Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday made a surprise announcement of hiking repo rates by 40 basis points to 4.40 per cent.He cited rising inflation, geo-political tensions and spiralling commodity prices as the main reason behind the move, which was decided in an off-cycle meeting of the monetary policy committee held between May 2-4.
Let’s look at top 5 quotes from the RBI Governor’s nearly half-an-hour address.
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“The monetary policy committee judged that the inflation outlook warrants an appropriate and timely response through resolute and calibrated steps to ensure that second-round effects of supply-side shocks on the economy are contained and long-term inflation expectations are kept firmly anchored,” RBI Governor Shaktikanta Das said.
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“The decision today to raise repo rate may be seen as reversal of rate action of May 2020. Last month, we had set out a stance of withdrawal of accommodation. Today’s action needs to be seen in line with that action,” Mr Das said.
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“I would like to emphasise that the monetary policy action is aimed at containing inflation spike and re-anchoring inflation expectation,” he added further.
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“High inflation is known as detrimental to growth,” the RBI Governor noted.
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“Most alarmingly, persistent and spreading inflationary pressures are becoming more acute with every passing day,” he said.
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