The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) met on August 3-5, 2022 , and released the RBI’s 3rd bi-monthly monetary policy of FY23 which retained India’s real Gross Domestic Product (GDP) growth at 7.2% for the FY23, with FY23‘s Q1 at 16.2%; Q2 at 6.2%; Q3 at 4.1%; and Q4 at 4%.

The stance is to focus on withdrawal of accommodations.

Real GDP growth for Q1FY24 is projected at 6.7%.

RBI’s Policy Rates:

The MPC raised the repo rate by 50 basis points to 5.40% from 4.90%. Consequently, the Standing Deposit Facility (SDF) Rate adjusted to 5.15% and Marginal Standing Facility (MSF) rate and Bank Rate to 5.65%.

  • Policy Repo Rate – 5.40%
  • Reverse Repo Rate – 3.35% |
  • Standing Deposit Facility (SDF) Rate – 5.15%
  • Marainal Standing Facility (MSF) Rate – 5.65%
  • Bank Rate – 5.05%
  • Cash Reserve Ratio (CRR) – 4.50% |
  • Statutory Liquidity Ratio – 18%

Domestic Economy:

  • The inflation projection is retained at 6.7% in 2022-23, with Q2 at 7.1%; Q3 at 6.4%; and Q4 at 5.8%, and risks evenly balanced.
  • PI inflation for Q1:2023-24 is projected at 5%.
  • CPI inflation eased to 7% (year-on-year, y-o-y) during May-June 2022 from 7.8% in April 2022, although it persists above the upper tolerance band.
  • Average daily absorption under the LAF (liquidity adjustment facility) at Rs 3.8 lakh crore during June-July 2022.
  • Money supply (M3) and bank credit from commercial banks rose (year-on-year) by 7.9% and 14%, respectively, as on July 15, 2022.
  • India’s foreign exchange reserves were placed at US$ 573.9 billion as on July 29, 2022.

Related Articles

Review: Citizen Gallery by Jerry Pinto

At a time when museums thought that the works of Progressive Artists should be hung in toilets, mercurial entrepreneur Kekoo Gandhy believed in modern Indian art. He and his wife Khorshed went on to set up Gallery Chemould. Jerry Pinto’s Citizen Gallery is a...