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RBI hikes repo rate, GDP growth estimate lowered

Wednesday, 07 December 2022, 13:12 IST
By SiliconIndia

RBI hikes repo rate, GDP growth estimate lowered

The decision of the Reserve Bank of India (RBI) Governor Shaktikanta Das headed six-member Monetary Policy Committee (MPC) will be announced on Wednesday. The central bank is widely seen raising its key policy rate as inflation continues to stay above its tolerance band.

RBI had slashed the repo rate in March, 2020 with an aim to cushion the impact of covid-induced lockdown, and maintained status-quo in the benchmark interest rate for almost two years before increasing it on May 4, 2022. The RBI has raised rates by a total 190 basis points since its first unscheduled mid-meeting hike in May and expectations are there for at least two more rate hikes in the current cycle including the one on Wednesday.

11:55:17 AM IST

Bond yields spike

Indian government bond yields rose, with the benchmark 10-year yield hitting 7.30%, after the Reserve bank of India raised lending rates by 35 basis points and sounded a hawkish note over inflation outlook.

11:29:16 AM IST

Expect bond markets to give up some gains: Lakshmi Iyer

Lakshmi Iyer, CEO- Investment Advisory, Kotak Investment Advisors Limited said, "The RBI MPC raised repo rate by 35 basis points to 6.25% with 5-1 vote. The stance remained focused on withdrawal of accommodation. While this was ours as well market consensus, it seems like we may not be fully done with the rate hiking cycle. The inflation guard continues to remain. Key to now track FOMC outcome in the coming week. Expect bond markets to give up some gains and trade range bound as global growth concerns dominate."

11:02:05 AM IST

Market was expecting RBI to signal rate cycle coming to an end: Analyst

“RBI raised the repo rate by 35 basis points, which is in line with expectations, but the tone of the governor was hawkish. With the GDP forecast cut, he kept the inflation forecast steady. The market was expecting the governor to signal that the rate hike cycle is coming to an end, but this policy shows no signs of it. However, the market is not reacting much to the policy. It may not be a market event with intraday volatility," said Parth Nyati, Founder, Tradingo.

10:45:06 AM IST

Economists see possibility of one more rate hike in current cycle

"The MPC delivered the 35 bps hike as expected while retaining the stance as 'withdrawal of accommodation.' We continue to expect the focus of MPC to remain in a watchful mode as uncertainties on inflation settle down. We see a possibility of another 25 bps rate hike before a prolonged pause," Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank.

10:36:20 AM IST

Market update: Nifty remains flat, Bank Nifty up 0.25%

Indian stock markets remained flat as RBI announced monetary policy while banking index edged higher.

10:33:05 AM IST

Inflation battle not over: RBI governor

Despite some signs of moderation, RBI Governor Shaktikanta Das said the main risk was that inflation would remain sticky and elevated. "The MPC was of the view that further calibrated monetary policy action was warranted to keep inflation expectations anchored, break core inflation persistence and contain second round effects," Das said as he announced the monetary policy committee's lending rate is up 117 bps in May-October."

10:30:54 AM IST

'Liquidity conditions set to improve'

RBI Governor Shaktikanta Das said that the central bank is ready to conduct LAF operations to infuse liquidity into the system. “Liquidity conditions are set to improve. Weighted avera07 Dec 2022, 10:36:20 AM IST

Market update: Nifty remains flat, Bank Nifty up 0.25%

Indian stock markets remained flat as RBI announced monetary policy while banking index edged higher.

10:26:48 AM IST

Bank rates

The standing deposit facility rate and the marginal standing facility rate were also increased by the same quantum to 6.00%and 6.50%, respectively.

10:23:13 AM IST

Inflation forecast unchanged, GDP growth estimated lowered

RBI has maintained consumer price index (CPI) inflation forecast for FY23 at 6.7%. Real FY23 GDP forecast lowered to 6.8% from 7%.

10:22:37 AM IST

India to be fastest growing Asian economy: RBI chief

RBI chief expects inflation to moderate as winter harvest come in. He said that Indian economy to be fastest growing in Asia this year. 

10:20:01 AM IST

Indian economy remains resilient: RBI chief

“Indian corporates are healthier than before.  Indian economy remains resilient. Our inflation remains elevated as in most part of the world," RBI chief

10:19:15 AM IST

RBI chief on Ukraine war

“Ukraine war has fundamentally changed the world economic outlook. Emerging countries have been among the worst affected," RBI chief

10:05:51 AM IST

RBI hikes repo rate

RBI has hiked the repo rate for the fifth time in a row, by 35 bps to 6.25% with immediate effect

09:45:48 AM IST

Rate hike expectations

“The RBI’s December policy meeting will likely see the MPC hiking repo rate by 35 bps; lower than the last three hikes of 50 bps. However, the decision is unlikely to be unanimous," said Suvodeep Rakshit, Chief Economist, Kotak Institutional Equities.

09:28:20 AM IST

Market opens flat

Equities open flat with a negative bias as Sensex dips over 55 points, Nifty falls 0.2% ahead of RBI's policy decision

09:17:57 AM IST

Rupee opening

Rupee declined 25 paise to open at 82.75 against the US dollar in early trade on Wednesday ahead of the RBI policy

09:06:27 AM IST

Outlook on growth to watch

The central bank's outlook, which will accompany the rates decision, will be an important pointer to future policy moves, as per experts

08:55:25 AM IST

MPC statement

RBI Governor Shaktikanta Das will announce the Monetary Policy statement at 10:00 am on Wednesday, December 7, 2022

08:46:20 AM IST

Inflation blues

India's retail inflation fell to a three-month low of 6.77% in October, down from 7.41% in September. However, remained above the RBI's tolerance band for the 10th consecutive row

08:36:57 AM IST

Rate hike on the cards

The central bank is widely expected to increase the repo rate again for the fifth time in a row by up to 35 basis points as inflation continues to stay above its tolerance band

08:30:41 AM IST


The six-member Monetary Policy Committee headed by the RBI Governor Shaktikanta Das started deliberations on the bi-monthly policy review on Monday