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New Delhi: In an emergency meeting, the Reserve Bank of India (RBI) on Wednesday raised the repo rate by 40 basis points to 4.40%, Governor Shaktikanta Das said. RBI hiked the cash reserve ratio also by 50 basis points to 4.5%.
Repo is the rate at which the central bank lends short-term funds to banks. The RBI has cut the repo rate by 250 basis points since February 2019 to help revive the growth momentum.
The monetary policy committee (MPC) voted unanimously to hike the repo rate to 4.40%. One basis point is one hundredth of a percentage point. The MPC decision is to maintain the accommodative stance.
Citing inflationary pressures, the RBI governor said that global oil prices are holding above USD 100 a barrel and are feeding into local fuel prices. Geopolitical tensions are pushing inflation, the RBI Governor said after the unscheduled MPC rate review meeting.
“Nine out of the 12 food subgroups registered an increase in inflation in March. High-frequency price indicators for April indicate the persistence of food price pressures,” Das added.
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