The Governor of the Reserve Bank of India (RBI) announced on Wednesday that the Monetary Policy Committee unanimously voted to raise the benchmark interest rate by 50 basis points with immediate effect. The RBI also maintained its FY23 GDP growth forecast of 7.2 percent.

The policy repo rate is now 4.90 percent, which is still lower than its pre-pandemic level. Rates on the Standing Deposit Facility (SDF) and the Marginal Standing Facility (MSF) have been raised by 50 basis points. The SDF rate has been adjusted to 4.65 percent, and the MSF rate has been adjusted to 5.15 percent.

The RBI revised its inflation forecast to 6.7 percent from 5.7 percent previously, as the protracted nature of the Russia-Ukraine conflict puts pressure on commodity prices globally.