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.“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.“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.“I would like to emphasise that the monetary policy action is aimed at containing inflation spike and re-anchoring inflation expectation,” he added further.”High inflation is known as detrimental to growth,” the RBI Governor noted.”Most alarmingly, persistent and spreading inflationary pressures are becoming more acute with every passing day,” he said.
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