After delivering its fifth straight rate hike, the Reserve Bank on Wednesday said “the worst of inflation is behind us” and signalled that the battle for price stability is bearing fruition.
Earlier in the day, the Reserve Bank of India’s Monetary Policy Committee (MPC), in a 5:1 decision, delivered a market-expected 35 bps repo rate hike, taking the key policy rate to 6.25 per cent.
The Reserve Bank ended three years of low interest rate regime in May when after an unscheduled MPC meeting, it announced a 40 bps hike in the repo rate from 4 per cent. Since then, in three successive monetary policy reviews, the MPC has hiked the policy rate by 50 bps in each round.
Lowering the size of the rate hike (from three rounds of 50 bps each to 35 bps on Wednesday) does not mean that there is room for any complacency on the inflation battle and the policy stance is far from neutral, Governor Shaktikanta Das and Deputy Governor Michael D Patra told reporters at the customary post-policy presser at the RBI headquarters here.