RBI raises the main lending rate by 35 basis points and projects 6.8% GDP growth

The repo rate was raised by 35 basis points (bps) to 6.25% on December 7 by the Reserve Bank of India’s Monetary Policy Committee (MPC), while the standing deposit facility was enhanced to 6%.

According to projections, CPI inflation will be 6.7% this year, 5% in the first quarter of 2023–24, and 5.4% in the second, assuming a typical monsoon. The Governor stated that the priority is still on controlling inflation and there won’t be a break in our efforts to lower inflation, first below 6% and subsequently closer to the 4% target.

The GDP forecast for 2022–2023 was also slightly decreased by the central bank’s main committee, dropping to 6.8% after the third quarter’s 4.4% increase.

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