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RBI Monetary Policy Review – MPC Hikes The Policy Repo Rate By 50 Bps To 5.9%: Motilal Oswal


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The Reserve Bank of India hiked its key policy rate (repo) by 50 basis points to 5.9% on September 30 2022. Consequently, the standing deposit facility and the margin standing facility/bank rate now stands at 5.65% and 6.15%, respectively.

The hike was in line with the market and our expectations. This is the fourth rate action by the central bank in FY23 till date.

Cumulatively, the RBI has the hiked repo rate by 190bp (excluding the 40 bps hike in the SDF in April 2022) in three scheduled and one out-of-turn policy meetings.

The Monetary Policy Committee reiterated its continued focus on ‘withdrawal of accommodation’ to contain inflation, while supporting growth.

The rate hike decision was arrived at by a 5-1 majority, with Dr. Ashima Goyal voting for a 35 bps rate hike. The decision on its stance too was made with a five-one majority as Dr. Jayanth Varma expressed reservations on the stance.

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