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Despite the spurt in economic activity, the persistent high rate of inflation remains the biggest concern for the economy. RBI Governor Shaktikanta Das said, earlier this month it was voted in favor of increasing the repo rate by 0.50% only to bring the rising inflation under control.
In the details of the Monetary Policy Committee (MPC) meeting released by the central bank on Wednesday, the governor said an increase in the repo rate will strengthen the RBI’s commitment to price stability. The primary goal for the central bank is to keep inflation under check. This is a precondition for sustainable growth in the medium term. The 6-member MPC, headed by Das, had agreed to increase the repo rate for the second time to 4.9 per cent on June 8.
Repo rate may increase again
The Governor said that the time is opportune for another hike in the policy rate to effectively tackle inflation. That’s why I will vote for 0.50 per cent hike in repo rate once again. This will help in controlling high inflation. Along with this, it will also help in mitigating the effects of adverse supply related problems.
$30 billion increase in foreign exchange reserves
The country’s foreign exchange reserves have increased by $30.3 billion in 2021-22. During 2020-21, an increase of $ 99.2 billion was registered in it. RBI said on Wednesday that during this period the foreign exchange reserve increased by $ 47.5 billion. On the other hand, the current account deficit stood at 1.2% of GDP in 2021-22. There was a surplus position of 0.9 per cent in 2020-21.