RBI Governor announces increase in repo rate by 25 basis points to 6.5%

Reserve Bank of India (RBI) governor Shaktikanta Das has announced the Monetary Policy statement for the year 2023. The announcement comes soon after the central bank's Monetary Policy Committee (MPC) meeting which was held for three days starting February 6. According to the announcement, RBI has increased the repo rate by 25 basis points to 6.5%. While making the announcement, the RBI governor said, "Unprecedented events of the last three years have put to test monetary policy across the world."

He added, "Emerging market economies are facing sharp tradeoffs between supporting economic activity and controlling inflation while preserving policy credibility." 

RBI Governor Shaktikanta Das also highlighted that inflationary conditions have worsened the economic conditions of India and that steps are being taken to ensure that inflation remains in control while growing.

In 2022, after that year's MPC meeting, the RBI raised the repo rate by 35 basis points to 6.26%. The fifth consecutive hike in the interest rate has taken the repo rate to its highest since March 2019. However, the reverse repo rate remains stable at 3.35%.