RBI hikes repo rates by 40 basis points to 4.40%: Governor Shaktikanta Das

New Delhi, May 04: The Reserve Bank of India on Wednesday hiked the repo rate by 40 basis points to 4.40%. The RBI has done the first rate hike since August 2018.

The repo rate are rates at which the country's central bank lends money to commercial banks in the country. This is likely to increase interest rates for loans and deposits.

The standing deposit facility rate will stand 25 basis points below that at 4.15% and the marginal standing facility rate will be at 4.65%.

Addressing a press conference, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) voted unanimously to increase policy repo rates by 40 bps with immediate effect.

While the inflation has remained above the targetted 6 per cent since January, RBI Governor Shaktikanta Das said the inflation print in April is also likely to be high.

The retail inflation print for March stood at 6.9 per cent.

The governor said the decision of MPC reversed the May 2020 interest rate cut by an equal amount.

Das said that geopolitical tensions are forcing inflation higher in major economies. He added that crude oil price is volatile and above $100 per barrel.

Edible oil shortage owing to Europe conflict and ban by exporter, said RBI Governor Shaktikanta Das.

"The sharp acceleration in headline CPI inflation in March 2022 to 7% was propelled in particular by food inflation," he said.

"Nine out of the 12 food subgroups registered an increase in inflation in the month of March. High-frequency price indicators for April indicate the persistence of food price pressures," he added.