The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged in its first bi-monthly policy meeting of FY23, Governor Shaktikanta Das said on Friday. This is the 11th time in a row that the central bank has maintained a status quo on the key policy rate.
With no change this time as well, the repo rate currently stands at 4 percent. The reverse repo rate has been maintained at 3.35 percent.
Stating RBI’s agenda for this year, Das said that the central bank, after three years, has prioritised inflation control over growth taking note of inflation risks amid current international instability due to Ukraine-Russia war.
Also Read:
Key Highlights:
The MPC, unanimously, voted to keep the repo rate unchanged at 4 percent and keep the stance accommodative. “MPC decided to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth”
Growth seen lower whereas inflation higher than projected.Growth Outlook
The real GDP growth forecast for FY 2023 lowered to 7.2 percent from the earlier 7.8 percent.GDP Forecast
Q1 seen at 16.2 percent vs the earlier 17.2 percent
Q2 seen at 6.2 percent vs the earlier 7 percent
Q3 seen at 4.1 percent vs the earlier 4.3 percent
Q4 seen at 4.0 percent vs the earlier 4.5 percentInflation Outlook
Assumptions: Normal monsoon in 2022 and average price of crude oil USD 100 per barrel.
CPI projected at 5.7 percent for FY23 vs the earlier 4.5 percent
Q1 CPI seen at 6.3 percent vs the earlier 4.9 percent
Q2 CPI seen at 5.8 percent vs the earlier 5 percent
Q3 CPI seen at 5.4 percent vs the earlier 4 percent
Q4 CPI seen at 5.1 percent vs the earlier 4.2 percentLiquidity
Width of the LAF corridor to be restored to the pre-pandemic configuration of 50 bps.
There will be standing facilities at both ends of the LAF corridor.
Access to SDF and MSF will be at the discretion of banks, unlike repo/reverse repo, OMO and CRR.
SDF rate will be 25 bps below the policy rate, at 3.75 percent.
MSF rate will continue to be 25 bps above the policy repo rate.
Opening time for financial markets to be restored to the pre-pandemic timing of 9:00 am w.e.f April 18, 2022.Additional Measures
Rationalisation of risk weights for individual housing loans to be extended till March 31, 2023.
Present limit under HTM category to be enhanced to 23 percent from 22 percent of NDTL till March 31, 2023.
HTM limits to be restored from 23 percent to 19.5 percent in a phased manner starting from quarter ending June 30, 2023.
Discussion paper on Climate Risk and Sustainable Finance to be published shortly for feedback.
Setting up of a committee to examine & review current state of customer service in RBI Regulated Entities proposed.
Card-less cash withdrawal facility proposed to be made available across all banks and ATM networks using UPI.First Published: Apr 8, 2022 2:33 PM IST
