RBI Monetary Policy 30 September 2022: Bad news for loan borrowers, RBI hikes repo rates by 50 basis points to 5.90%

New Delhi: In a move that will raise borrowing costs for corporates and individuals even further, the RBI Monetary Policy Committee led by Governor Shaktikanta Das hiked Repo Rate by 50 basis points to 5.90 percent on Friday.

Repo is the rate at which Reserve Bank of India lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. This is the third hike since the beginning of the current financial year, taking the rate is back to pre-pandemic levels in order to tame the inflationary pressure.

The six-member Monetary Policy Committee headed by Reserve Bank of India Governor Shaktikanta Das started deliberations on the bi-monthly policy review on Wednesday. 

Adressing a press conference, RBI Governor Shaktikanta Das said that there is nervousness in financial market, global economy eye of new storm. He added that Indian economy continues to be resilient in midst of global turmoil.

World is in midst of third major shock from aggressive monetary tightening by central banks, Das said.

This is the fourth consecutive rate hike after a 40 basis points increase in May and 50 basis points hike each in June and August. In all, RBI has raised benchmark rate by 1.90 per cent since May this year. The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das decided in favour of the rate hike.