RBI monetary policy: Repo rate hiked by 50 bps, here is what it tells us

RBI Policy: Shaktikanta Das announced the RBI MPC's decision to hike the repo rate by 50 basis points to 5.9% and slash the GDP forecast for FY23 to 7% from 7.2% earlier

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced a repo rate hike of 50 basis points (bps) following the two-day Monetary Policy Committee (MPC) meeting. With this, the repo rate now stands at 5.90 per cent. This is RBI MPC's fourth consecutive rate hike in this financial year.   

"The MPC decided by a majority of 5 out of 6 to increase the policy repo rate by 50 basis points to 5.9 per cent with immediate effect," Das said. 

The repo rate is usually hiked to reduce the liquidity in the economy and to contain inflation.

Owing to slowing economic