CURRENT AFFAIRS

Detailed explanation-1: -The Monetary Policy Committee (MPC) met on 6th, 7th and 8th February 2023. 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-2: -On 7th December 2022, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) raised the repo rate by 35 basis points (bps) to 6.25%.

Detailed explanation-3: -Since the Repo rate is hiked the banks will now have to pay a higher amount of interest to the RBI which in turn shall be collected from the retail/ corporate borrowers of the banks. This would result in higher interest outflow on loans taken from the banks. Thus the loans in general will become costlier by 1-2%."

Detailed explanation-4: -The RBI raised the Repo Rate by 35 basis points on December 7, 2022, bringing the rate up to 6.25% and marking the fourth hike or Repo Rate increase in 2022. Earlier RBI increased the Repo Rate by 50 basis points to 5.9% on September 30, 2022. In the current fiscal year, the RBI has increased the Repo Rate four times.