The Reserve Bank of India (RBI) on Friday hiked the key lending rate – the repo rate – by 50 basis points to a 3-year-high of 5.9 per cent. Announcing the move, which was among several decisions taken during the RBI’s Monetary Policy Committee (MPC) meet earlier this month, with the announcements being made today, Das also said that in the next financial year, the country is likely to have a real Gross Domestic Product (GDP) rate of 7 per cent.
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Here are highlights from the RBI governor’s address:
(1.) ‘Resilience’ of Indian economy: “After Covid and Ukraine war, the world is facing another storm – aggressive monetary tightening by central banks. However, Indian economy continues to be resilient in midst of global turmoil. Economic activity in the country also remains stable in the face of such global challenges.”
(2.) ‘Private consumption picking up’: “High frequency data for second quarter indicates that economic activities remain resilient with private consumption picking up. India’s GDP grew 13.5 per cent in the April-June period this fiscal as the economy continued its recovery from the pandemic.”
(3.) Depreciation of Rupee vs US dollar: “Despite depreciation, the movement has been orderly as compared to other emerging market currencies. From April 1, 2022, to September 1, 2022, the rupee has depreciated 7.4 per cent.
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(4.) Decline in forex reserve: “The country’s forex reserve has decline 67 per cent this year due to change in valuation of the foreign exchange rate.”
(5.) “As we celebrate Mahatma Gandhi’s birth anniversary…: “As we celebrate Mahatma Gandhi’s birth anniversary in another two days, I conclude by statement with his insightful words – ‘We are wakeful, ever resilient, ever striving.”