The Reserve Bank of India(RBI) today increased the repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.50 per cent with immediate effect. Similarly, the standing deposit facility (SDF) rate was adjusted to 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 6.75 per cent.
RBI Governor Shaktikant Das announced the bimonthly policy review after the Monetary Policy Committee meeting which had begun on Monday. While announcing the policy review he said that on the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee decided to increase the policy repo rate. Governor said that unprecedented events of the last three years have put to test monetary policy across the world. Emerging market economies are facing sharp tradeoffs between supporting economic activity and controlling inflation while preserving policy credibility.
