RBI raises repo rate by 40 bps to 4.40 per cent
Published On: Wednesday, May 4, 2022 | By: Team KnowMyStock
RBI Governor Shaktikanta Das today(4 May 2022) said the Monetary Policy Committee (MPC) has unanimously voted to increase the repo rate by 40 basis points to 4.40 percent with immediate effect. The Governor said that the MPC has also decided to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth. Consequently, the standing deposit facility (SDF) rate stands adjusted to 4.15 percent and the marginal standing facility rate (MSF) to 4.65 percent.
These decisions are in consonance with the objective of achieving the medium-term target for consumer price index inflation of 4 per cent within a band of 2 per cent.
The governor said MPC ensured inflation remains aligned with the target while Indian economy has shown resilience, helped by favourable policies despite the inflationary pressures.
As the shortages, volatility in commodity and financial markets are becoming more acute,the MPC have deployed both conventional and unconventional tools to support growth, Das said.
The Cash Reserve Ratio (CRR) will also be increased to 50 basis points to 4.5 per cent with effect from May 21, which in turn will lead to withdrawal of Rs 87,000 crore, he said.The yield on 10-year benchmark bond spiked 7.4 per cent after the news.
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