The Reserve Bank of India maintained its inflation forecast of 6.7% for fiscal year 2023, but continued to lower its GDP growth forecast for fiscal year 2023 from 7% to 6.8%.

After India's inflation rate fell to 6.77% in October, below 7% for the first time in three months, the Indian central bank began to slow down its pace of tightening, and the interest rate level may be close to its peak.

On Wednesday, December 7, the Reserve Bank of India raised interest rates by 35 basis points, raising the repurchase rate from 5.9% to 6.25%, which was basically in line with market expectations and was the fifth consecutive rate hike. The standing deposit lending rate and the marginal standing lending rate also both rose by 35 basis points to 6.00% and 6.50%, respectively.

The Reserve Bank of India will also maintain its inflation forecast of 6.7% for fiscal year 2023, but continue to lower its economic growth forecast for fiscal year 2023, with the GDP growth rate dropping from 7% to 6.8%.

After the interest rate decision was announced, the Indian rupee fell to 82.64 against the US dollar, and the 10-year Indian government bond yield rose to 7.299%, setting a new high in nearly two weeks.