RBI hikes repo rate by 50 basis points

New Delhi: For the fourth time in a row, the Reserve Bank of India (RBI) on Friday hiked the repo rate by 50 basis points (BPS) to 5.9 per cent with immediate effect.

A six-member Monetary Policy Committee (MPC) began its three-day meeting on September 28 to deliberate on the prevailing economic situation.

The repo rate is the interest rate at which the central bank lends to commercial banks.

This is the RBI’s fourth rate hike in the current financial year. In its off-cycle monetary policy review in August, the RBI increased the repo rate by 50 basis points (bsp) to 5.4 per cent.

Earlier in May, the RBI hiked the policy repo rate by 40 basis points or 0.40 per cent to 4.40 per cent. Then in June, the RBI further raised the rate to 4.90 per cent, a 50 basis points increase. Overall, the central bank has raised the benchmark rate by 1.90 per cent since May this year.