Mumbai: Reserve Bank of India today raised the repo rate by 50 basis points (bps) to 5.40 per cent with immediate effect. The policy rate rise is the third straight increase by the Monetary Policy Committee (MPC) in this financial year amid high inflation.
The rate hike has been announced by RBI Governor Shaktikanta Das as a decision of the Monetary Policy Committee (MPC).
With the latest hike, the repo rate or the short-term lending rate at which banks borrow crossed the pre-pandemic level of 5.15 per cent. Retail inflation has continued to remain above the central bank's comfort level of 6 per cent since January this year.
The retail inflation or Consumer Price Index (CPI), which RBI factors in while considering its benchmark lending rate, stood at 7.01 per cent in June.
The RBI chief also said the domestic economy is showing signs of broadening.