The Monetary Policy Committee of the Reserve Bank of India hiked rates by 25 basis points to 6.5 per cent, Governor Shaktikanta Das announced on February 8. The RBI has increased the repo rate by a cumulative 250 basis points since May last year.

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The Reserve Bank of India (RBI) has recently announced an increase in the repo rate from 6.25% to 6.5%. This is the first time in two years that the central bank has increased the repo rate, a move that is expected to have a significant impact on the Indian economy.

The repo rate is the rate at which banks borrow money from the central bank. An increase in the repo rate means that banks will have to pay more for the money they borrow from the RBI, thus making it more expensive for them to lend money to consumers. This, in turn, is expected to lead to an increase in interest rates on loans and credit cards, making it more expensive for consumers to borrow money.

The RBI has also projected a GDP growth rate of 6.4% for the financial year 2023-23. This is lower than the 7.2% growth rate that was projected for the current financial year, but still higher than the 5.8% growth rate that was projected for the previous financial year.

The RBI has attributed the lower growth rate to the effects of the coronavirus pandemic, which has impacted the Indian economy significantly. The central bank has also said that the increase in the repo rate is intended to help contain inflation, which has been rising due to the pandemic.

It remains to be seen how the increase in the repo rate will affect the Indian economy in the short and long term. In the short term, it is expected to lead to an increase in the cost of borrowing for consumers, which could lead to a slowdown in consumption. In the long term, the RBI hopes that the increase in the repo rate will help to contain inflation and support economic growth.

Only time will tell how the increase in the repo rate will impact the Indian economy, but it is certainly a move that will have far-reaching implications.