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Union Finance Minister Nirmala Sitharaman on Saturday asserted that the Reserve Bank of India's (RBI) decision to increase key policy interest rates is a part of the synchronised event by the central banks globally.

The decision did not surprise the government, Sitharaman said at an event adding, "It (rate hike) came as a surprise because it came between the two monetary policy reviews."

The Reserve Bank of India on May 4 increased the policy repo rate by 40 basis points to 4.40 per cent. The central bank also announced a 0.50 per cent increase in the cash reserve ratio (CRR).

The decision was taken in the unscheduled meeting of the RBI's Monetary Policy Committee.

The Monetary Policy Committee (MPC) decided to hold an off-cycle meeting on 2nd and 4th May 2022 to reassess the evolving inflation-growth dynamics and the impact of the developments after the MPC meeting of April 6-8, 2022, RBI Governor Shaktikanta Das had said while making the announcement about the rate hike.

"Based on this assessment of the macroeconomic situation and the outlook, the MPC voted unanimously to increase the policy repo rate by 40 basis points to 4.40 per cent, with immediate effect," Das said. The repo rate is the interest rate at which the RBI lends short-term funds to banks.

The standing deposit facility (SDF) rate stands adjusted to 4.15 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 4.65 per cent.

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