RBI hikes repo rate by 25 basis points to 6.5%

Reserve Bank of India
Reserve Bank of India (RBI)

New Delhi, August 1: The Reserve Bank of India on Wednesday increased the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.5 per cent in its third monetary policy review of 2018-19.

“On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.5 per cent,” the central bank said in the monetary policy review statement.

“Consequently, the reverse repo rate under the LAF stands adjusted to 6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.75 per cent.”

Addressing a press conference, RBI Governor Urijit Patel said “Industrial growth strengthened in April. Service sector is picking up. FDI improved in first two months. Investment remain broadly firm, GDP is projected at 7.4 per cent”.

On the domestic front, Patel stated Monetary Policy Committee took note in rise in retail CPI inflation for the third consecutive month in June, food inflation remained muted, other components recorded moderate to sharp price increases”.

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