MPC meet: No change in stance, RBI hints at more policy rate hikes

Policy rate increased by 25 bps to a 4-year high of 6.5%

In line with expectations, the six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) on Wednesday increased the policy repurchase or repo rate by 25 basis points (bps) to a four-year high of 6.5 per cent.

The committee retained its stance of withdrawal of accommodation, though many thought that it would change this to neutral. With the latest increase, the policy rate completed a cycle under RBI Governor Shaktikanta Das, as the repo rate was 6.5 per cent when he took charge in December 2018.

In his first policy as MPC chair, the committee reduced the rate by 25