New Delhi, Dec 7 (UNI) Federation of Indian Chambers of Commerce and Industry (FICCI) on Wednesday welcomed the Reserve Bank of India (RBI)'s decision to hike repo rate by 35 basis points (bps) to 6.25 per cent with immediate effect.



Sanjiv Mehta, President, FICCI said the Reserve Bank’s policy action hiking the policy repo rate by 35 bps was widely anticipated as the war against inflation is still far from over.



'Retail inflation has remained above the Central Bank’s tolerance threshold of 6 per cent through the year 2022. Core inflation remains sticky and uncertainty continues to surround RBI’s near-term inflation outlook given the complex geo-political developments in Europe, recurrence of adverse climate related events and the still high commodity prices globally. While the CPI inflation projection has been maintained at 6.7 per cent for 2022-23 and some early signs of inflation cooling down on a sequential basis are coming to fore, we need to see this trend emerge on a durable basis for RBI to indicate a change in stance,"he said.

Furthermore, while the Indian economy remains resilient, the RBI has revised downward its GDP growth forecast for 2022-23 to 6.8 per cent from 7.0 per cent in the last monetary policy announcement.

Even at this slightly lower rate of growth, India continues to be amongst the fastest growing economies globally and we are encouraged by the Governor’s statement that liquidity will be made available for productive activities as required so that the growth impulses get nurtured," Mehta added.

In a bid to contain inflation which has been above its tolerance level, the Reserve Bank of India (RBI) on Wednesday raised policy repo rate by 35 basis points (bps) to 6.25 per cent with immediate effect.

This is the fifth repo rate hike in the current year by the RBI to control inflation .

UNI AKM BAV