The Monetary Policy Committee of the Reserve Bank has announced an increase in the key policy rate repo by 0.35 percent to 6.25. In this way, from May 2022, the Reserve Bank has increased the repo rate by a total of 2.25 percent.
Due to high inflation, the Reserve Bank is increasing the interest rates. Retail inflation has consistently remained above the Reserve Bank’s comfortable level of 6 per cent for the past few months.
State Bank of India Chairman Dinesh Khara said, “The policy statement is tight-lipped and forward-looking and strikes a fine balance between growth and inflation. The slight downgrade in growth estimates shows that it is difficult to say anything in the current uncertain environment.
They also welcomed the operational flexibility given to banks to manage their investments in government securities.
AK Goyal, chairman of bankers’ body IBA, said monetary policy is largely focusing on controlling prices. He said that since inflation is expected to come down to 4-6 per cent in the fourth quarter of FY 2022-23 itself, a modest rate hike is expected going forward.
Zareen Daruwala of Standard Chartered Bank said the MPC has struck a delicate balance between containing inflation and supporting growth.
Murali Ramakrishnan of South Indian Bank said the initiative on UPI is more comprehensive and will further strengthen the digital payments ecosystem.
Source: navbharattimes.indiatimes.com
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