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RBI cuts growth forecast to 7% for current fiscal

Unveiling the fifth monetary policy for this fiscal, RBI Governor Shaktikanta Das said the central bank remains committed to price stability to put the country on a sustained path of growth.

PTI Reported By: PTI New Delhi Published on: September 30, 2022 11:48 IST
As per the latest data, the inflation was at 7 per cent in
Image Source : PTI As per the latest data, the inflation was at 7 per cent in August.

RBI rate hike: The Reserve Bank of India on Friday slashed the growth projection to 7 per cent for the current fiscal from the earlier forecast of 7.2 per cent, citing aggressive tightening of monetary policies globally and moderation in demand.

Unveiling the fifth monetary policy for this fiscal, RBI Governor Shaktikanta Das said the central bank remains committed to price stability to put the country on a sustained path of growth.

Real GDP growth in the first quarter of the current fiscal was 13.5 per cent. Das, however, cautioned that there is a third wave of shock globally triggered by aggressive monetary policy tightening to curb inflation.

The central bank in April slashed the real GDP growth projection to 7.2 per cent from its earlier forecast of 7.8 per cent for 2022-23.

RBI rate hike 

Reserve Bank of India hiked the repo rate by 50 basis points to 5.9%. This is the fourth hike in a row. With the latest hike, the repo rate or the short-term lending rate at which banks borrow from the central bank is now close to 6 per cent. This is the fourth consecutive rate hike after a 40 basis points increase in May and 50 basis point hike each in June and August. In all, RBI has raised benchmark rate by 1.90 per cent since May this year.

The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das decided in favour of the rate hike. The Consumer Price Index (CPI) based inflation, which RBI factors in while fixing its benchmark rate, stood at 7 per cent in August. Retail inflation has been ruling above the RBI's comfort level of 6 per cent since January this year. 

Also Read: RBI hikes repo rate by 50 basis points to 5.9%; EMIs set to rise again

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