The monetary policy statement, key policy rates kept unchanged

On 10th February, the governor, Mr. Shaktikanta Das, of the apex bank of the country Reserve Bank of India, gave the monetary policy review of 2021-22.

In the monetary policy review of 2021-22, RBI in its statement talked about the global economy, domestic economy, future projection, and policy rates.

Policy Rates:

  • Repo Rate-4%
  • reverse Repo-3.35%
  • MSF rate and Bank Rate-4.25%

Global Economy:

  • The third wave of covid or the emergence of omicron dampened the business sentiment across the world and the global composite purchasing manager index (PMI)  slipped to an 18 month low with weakness in both services and manufacturing to 51.4 in Jan 2022.
  •  International Monetary Fund (IMF) has revised global output and trade projection for 2022 to 4.4%  and 6%, from its earlier forecasts of 4.9% and 6.7 %, respectively.

Domestic Economy:

  • India’s gross domestic product, as estimated by National Statistical Office (NSO) on January 7, 2022, is expected to be around 9.2% for 2021-22.
  • Amid Omicron, demand has contracted in the current fiscal year.
  • Rural demand is indicated by the sale of two-wheeler and tractors, which has declined in December 2021
  • Area Sown under Rabi crop till 4th Feb 2022 is up by 1.5% on YoY basis.
  • Non-oil and non-gold imports expanded amid strong demand.
  • Capital goods saw an increase in import in December, while production of same contracted in November on YoY basis.
  • PMI manufacturing contracted to 54 in January against 55.5 recorded in December.
  • PMI service also contacted 51.5 in January from 55.5 recorded a month ago.
  • Liquidity Adjustment Facility (LAF) contracted in January to Rs7.6lak crore from Rs 8.6 lakh crore of LAF, during October-November 2021.
  • Reserve money expanded by 8.4% on 4th February 2022 on a YoY basis
  • Money supply and Bank Credit increased by 8.4% and 8.2%, respectively, on a YoY basis.
  • Indian Foreign exchange reserve touched the highest level to $632billion.


  • Inflation for 2021-22 is projected at 5.3% and Q4 at 5.7%.
  • CPI inflation for 2022-23 is projected at 4.5% with Q1 at 4.9%, Q2 at 5% and Q3 at 4%, and Q4 at 4.2%.
  • GDP for 2022-23 at 7.8% with Q1 at 17.2% andQ2 at 7% andQ3 at 4.3% and Q4 at 4.5%.

Markets have taken the monetary policy with a positive note as nifty post Monetary policy statement gained 169.35 points from last day’s close of 17463.80.


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