{"id":1614,"date":"2022-10-01T13:15:03","date_gmt":"2022-10-01T07:45:03","guid":{"rendered":"https:\/\/in.nttdatapay.com\/blog\/?p=1614"},"modified":"2025-07-18T14:05:30","modified_gmt":"2025-07-18T08:35:30","slug":"rbis-new-monetary-policy-2022","status":"publish","type":"post","link":"https:\/\/in.nttdatapay.com\/blog\/rbis-new-monetary-policy-2022\/","title":{"rendered":"RBI\u2019s New Monetary Policy Review: Repo Rate Raised by 50 bps -2022"},"content":{"rendered":"\r\n<p>Following a three-day meeting of the central bank\u2019s<strong> Monetary Policy<\/strong> Committee (MPC), RBI Governor Shaktikanta Das announced a 50-basis-point hike in the repo rate.\u00a0 The decision of the six-member MPC was made public on September 30, 2022 (Friday), to reduce the prolonged above-target retail inflation rate.\u00a0<\/p>\r\n\r\n\r\n\r\n<p>The key interest rate, or repo rate, at which the RBI loans short-term funds to commercial banks is currently at 5.90%, the fourth consecutive increase in the current cycle.<\/p>\r\n\r\n\r\n\r\n<p>To lessen the effects of the COVID-induced lockdown, the RBI lowered the repo rate in March 2020. It then kept the benchmark interest rate unchanged for nearly two years until increasing it on May 4, 2022.\u00a0<\/p>\r\n\r\n\r\n\r\n<p>As central banks struggle to combat soaring inflation, the RBI has currently hiked the repo rate by 190 basis points in four installments since May.<\/p>\r\n\r\n\r\n\r\n\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f2460-o1\" lang=\"en-GB\" dir=\"ltr\" data-wpcf7-id=\"2460\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/blog\/wp-json\/wp\/v2\/posts\/1614#wpcf7-f2460-o1\" method=\"post\" class=\"wpcf7-form init\" aria-label=\"Contact form\" novalidate=\"novalidate\" data-status=\"init\">\n<fieldset class=\"hidden-fields-container\"><input type=\"hidden\" name=\"_wpcf7\" value=\"2460\" \/><input type=\"hidden\" name=\"_wpcf7_version\" value=\"6.1.4\" \/><input type=\"hidden\" name=\"_wpcf7_locale\" value=\"en_GB\" \/><input type=\"hidden\" name=\"_wpcf7_unit_tag\" value=\"wpcf7-f2460-o1\" \/><input type=\"hidden\" name=\"_wpcf7_container_post\" value=\"0\" \/><input type=\"hidden\" name=\"_wpcf7_posted_data_hash\" value=\"\" \/><input type=\"hidden\" name=\"_wpcf7_recaptcha_response\" value=\"\" \/>\n<\/fieldset>\n<div class=\"cus-form\">\n\t<p style=\"font-size: 24px;font-weight: 600;text-align: center;\">Enquire Now\n\t<\/p>\n\t<p><label>Products Required:<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"products\"><select class=\"wpcf7-form-control wpcf7-select wpcf7-validates-as-required form-control\" aria-required=\"true\" aria-invalid=\"false\" name=\"products\"><option value=\"Payment Gateway\">Payment Gateway<\/option><option value=\"POS Machine\">POS Machine<\/option><option value=\"Reseller\">Reseller<\/option><\/select><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"uname\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-text wpcf7-validates-as-required form-control\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Name*\" value=\"\" type=\"text\" name=\"uname\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"phone\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-tel wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-tel form-control\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Phone*\" value=\"\" type=\"tel\" name=\"phone\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"email\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-email wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-email form-control\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Email*\" value=\"\" type=\"email\" name=\"email\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"message\"><textarea cols=\"10\" rows=\"3\" maxlength=\"2000\" class=\"wpcf7-form-control wpcf7-textarea form-control\" aria-invalid=\"false\" placeholder=\"Message\" name=\"message\"><\/textarea><\/span><br \/>\n\t\n\t<input class=\"wpcf7-form-control wpcf7-hidden\" id=\"utm\" value=\"\" type=\"hidden\" name=\"utm\" \/><input class=\"wpcf7-form-control wpcf7-submit has-spinner\" type=\"submit\" value=\"Submit\" \/>\n\t<\/p>\n<\/div>\n<style>\n.cus-form .form-control{width: 100%!important;margin: 7px 0px;padding: 8px;border-radius: 3px;height: auto;line-height: 20px;}\n.cus-form{display: block;margin: 0 auto;max-width: 400px;width: 100%;padding: 20px;box-shadow: 0px 0px 4px 0px #0000002b;border-radius: 6px;margin-bottom: 25px;padding-bottom: 0px;}\n.cus-form .wpcf7-submit{margin: 0 auto;display: block;}\n.cus-form h3{background: #ff6644;text-align: center;margin: -21px;margin-bottom: 20px;padding: 6px;}\n<\/style>\n<p><script>\ndocument.getElementById(\"utm\").value = window.location.href;\n\ndocument.addEventListener( 'wpcf7mailsent', function( event ) {\n location = 'https:\/\/in.nttdatapay.com\/blog\/thankyou\/';\n}, false );\n<\/script>\n<\/p><div class=\"wpcf7-response-output\" aria-hidden=\"true\"><\/div>\n<\/form>\n<\/div>\n\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">RBI\u2019s new monetary policy: Key Highlights<\/h2>\r\n\r\n\r\n\r\n<p><strong>Here are the key highlights of RBI\u2019s bi-monthly monetary policy review<\/strong><\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>For the fourth time in a row, the <strong>RBI increased the repo rate by 50 basis <\/strong>points to 5.9% with immediate effect. MPC decided to maintain its focus on &#8220;withdrawal of accommodation.&#8221;<\/li>\r\n\r\n\r\n\r\n<li>RBI\u2019s governor Shaktikanta Das mentioned that the committee\u2019s decision to increase the repo rate is due to the soaring inflation rates in the country. He said that inflation is expected to come down to the target of 4% over two years.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>In order to strengthen measures for compliance with globally accepted prudential rules, the RBI proposed that the country&#8217;s lenders adopt the expected loss method for the loss allowances they must maintain regarding their exposures.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>The inflation forecast has remained unchanged. Consumer Price Index (CPI) inflation has been projected by the RBI to remain at 6.7% for FY23.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>When it comes to the GDP growth forecast, the real gross domestic product (GDP) growth prediction for FY23 has been cut by the RBI from 7.2% to 7%.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>According to <a href=\"https:\/\/economictimes.indiatimes.com\/news\/newsblogs\/rbi-mpc-meet-2022-live-news-monetary-policy-reserve-bank-of-india-shaktikanta-das-speech-latest-updates-30-sep-2022\/liveblog\/94545497.cms\" target=\"_blank\" rel=\"noopener\">The Economic Times<\/a>, RBI Guv said, &#8220;the current account deficit (CAD) for Q1:2022-23 is placed at 2.8 per cent of GDP with trade deficit at 8.1 per cent of GDP. Various leading indicators, including global PMIs, point to the weakening of global growth momentum and downside risks to global trade.\u201d\u00a0<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p>It has also come to our notice that India\u2019s import growth, despite hitting some breaks, has exceeded the export growth.<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>The rates for the marginal standing facility (MSF) and the standing deposit facility (SDF) were both raised by the same percentage, to 5.65% and 6.15%, respectively.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>High-frequency data for the second quarter show that the economy is still robust and that private consumption has held steady. Rural demand and investment demand are progressively increasing, with the agriculture sector remaining resilient.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p>According to RBI officials, the central bank provided reasonably balanced advice, highlighting the need to maintain robust domestic economic growth while emphasizing the risks of escalating financial and economic turmoil around the world. Overall, the markets have responded favourably to the policy announcement.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">How will this impact your finances?<\/h2>\r\n\r\n\r\n\r\n<p>After the inflation rate went above the central bank&#8217;s target level, the RBI raised repo rates for the fourth time in this cycle. This is consistent with the US Federal Reserve&#8217;s recent announcement of its third consecutive 75-basis-point rate hike, which was done without showing any signals of slowing down.<\/p>\r\n\r\n\r\n\r\n<p><strong>Though the effect of this hike is yet to be seen on inflation, here\u2019s how it will impact your finances and EMIs:<\/strong><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">1. High borrowing cost<\/h3>\r\n\r\n\r\n\r\n<p>An increase in the repo rate automatically translates to a higher borrowing cost. This is due to the fact that when repo rates rise, it also results in rising borrowing costs for banking institutions, which are then passed on to account holders in the form of higher interest rates on loans and deposits.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">2. Decreased purchase of goods and services<\/h3>\r\n\r\n\r\n\r\n<p>Even if increasing the repo rate is vital to battle inflation, doing so repeatedly in a short time would unintentionally have a negative effect on the nation&#8217;s economic growth.\u00a0<\/p>\r\n\r\n\r\n\r\n<p>Since people tend to buy fewer goods and services, it will directly affect demand, and ultimately, the overall growth is slowed down.\u00a0<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">3. Home loans to become expensive<\/h3>\r\n\r\n\r\n\r\n<p>With an increase in the repo rate, the EMIs on your home loan, car loan, and other loans are also expected to rise. You will have to pay an increased EMI for the same amount of loan.<\/p>\r\n\r\n\r\n\r\n<p>It\u2019s advised to extend your loan period to save yourself from the adverse effects of this price hike!<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\r\n\r\n\r\n\r\n<p>The MPC conducts bi-monthly reviews of the monetary policy, and this blog was the gist of everything that happened this September, 2022. The committee\u2019s decision to increase the repo rate by 50 bps resulted due to the increasing inflation rates in the country. Though these price hikes can severely affect the financial stability of the common man, the financial markets have responded positively to all the policy announcements.<\/p>\r\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Following a three-day meeting of the central bank\u2019s Monetary Policy Committee (MPC), RBI Governor Shaktikanta Das announced a 50-basis-point hike in the repo rate.\u00a0 The decision of the six-member MPC&#8230; <!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":1,"featured_media":4911,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17,16],"tags":[],"class_list":["post-1614","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","category-payment"],"_links":{"self":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts\/1614","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/comments?post=1614"}],"version-history":[{"count":3,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts\/1614\/revisions"}],"predecessor-version":[{"id":4912,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts\/1614\/revisions\/4912"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/media\/4911"}],"wp:attachment":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/media?parent=1614"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/categories?post=1614"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/tags?post=1614"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}