CURRENT AFFAIRS

Detailed explanation-1: -8th February 2023 – Reserve Bank of India (RBI) raises repo rate by 25 basis points to 6.5%.

Detailed explanation-2: -Here’s why. There is room for at least another 50 bps hike in India’s policy repo rate going forward. In December 2022 policy, RBI hiked the repo rate by 35 bps to 6.25%, however, maintained its withdrawal of accommodation stance.

Detailed explanation-3: -On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (February 8, 2023) decided to: Increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.50 per cent with immediate effect.

Detailed explanation-4: -Based on an assessment of the macroeconomic situation and its outlook, the MPC decided by a majority of 4 members out of 6 to increase the policy repo rate by 25 basis points to 6.50 per cent, with immediate effect.

Detailed explanation-5: -Reverse Repo Rate Cut Impact: Whenever RBI decides to reduce the reverse repo rate, banks earn less on their excess money deposited with the Reserve Bank of India. This leads the banks to invest more money in more lucrative avenues such as money markets which increases the overall liquidity available in the economy.