In the first bi-monthly monetary policy report of FY2023, RBI talked out the period of October 2021 to March 2022. During this time, the monetary policy committee(MPC ) met three times
In this current report, MPC talked about Inflation, growth, and Key banking rates. These are three major dimensions on which the entire monetary policy is based.
INFLATION
The rise in crude prices coupled with feedstock pressure will continue to push retain inflation.
- RBI has forecasted inflation for Q4 of FY21-22 to 6.1%.
- For FY23, retail inflation is forecasted at 5.7%
- Inflation for Q1 of FY22-23 is projected at 6.3%.
- Some relief in Q3 and Q4 of FY22-23 with an Inflation projection of 5.4% and 5.1%, respectively.
GROWTH OUTLOOK
Economic activity which was recovering with the ebbing of the third wave, rapid stride towards universal vaccination, and supportive fiscal and monetary policies now faces significant headwinds from the exacerbating geopolitical developments and the accompanying sharp rise in global commodity prices and weakening global growth outlook.
- The GDP outlook for FY23 is projected at 7.2%
- Q1 of FY22-23 at a whopping 16% amid favorable base effect.
- Q3 and Q4 of FY2023 are projected at 6.2% and 4% respectively.
KEY RATES
The apex bank of the country, RBI has decided to keep the key rates unchanged, in this first bi-monthly policy meeting of FY22-23.
- REPO rate remains at 4%
- Reserve Repo at 3.35%.
- Marginal Standing Facility rate at 4.25%
- CRR and SLR at 4% and 18%, respectively.
MARKET
The market has reacted to the Monetary policy with a positive and accommodating note. NIFTY and SENSEX are trading at 17738.70 and 59297.42, up by 99.15 points and 262.47 points, respectively, from the previous close.