Rupee gains 46 paise To 78.94 against US Dollar as RBI increases Repo Rate

Guwahati: The Indian Rupee increased 46 paise against the US Dollar on Friday, reaching Rs. 79.24, ahead of the Reserve Bank of India’s announcement of the repo rate.

The Monetary Policy Committee (MPC) of the RBI raised the repo rate by 50 basis points (bps), to 5.40 percent, on Friday in an effort to contain inflation.

This was announced by RBI Governor Shaktikanta Das.

This fiscal year, the central bank has raised the repo rate three times so far.

The repo rate was previously increased by 40 and 50 basis points by the RBI in May.

In June of this year, the Consumer Price Index (CPI) was 7.01, and since January, it has remained above the Central Bank’s 6% comfort limit.

The RBI Governor stated in his speech that the MPC decision was unanimous and that the MPC has chosen to continue focusing on the withdrawal of its accommodative stance in order to control inflation.

He also disclosed that the rates for the Standing Deposit Facility (SDF) and the Marginal Standing Facility (MSF) had been modified to 5.15 percent and 5.65 percent, respectively.

Das noted that India has had significant inflation and that $13.3 billion in foreign cash has left the nation in recent months.

He stated that inflation is anticipated to stay above 6%. With a typical monsoon in 2022 and an average crude oil price of US$105 per barrel, the inflation prediction for 2022–2023 is kept at 6.7%, with Q2 inflation at 7.1%, Q3 inflation at 6.4%, and Q4 inflation at 5.8%, with risks being evenly distributed.

According to him, the real GDP growth rate for 2022–2023 is still 7.2%, with Q1 growth rates of 16.2%, 6.2%, 4.1%, and 4.0%, and risks that are fairly balanced.

He also issued a warning over the current conflict between Russia and Ukraine.

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