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The six-member monetary policy committee (MPC) has unanimously decided to keep the repo rate unchanged at 4 per cent as economic growth is barely above pre-pandemic level.
The committee also unanimously voted to keep the monetary policy stance accommodative while focussing on withdrawal of accommodation to keep inflation with target.
That the Governor did not refer to the usual “continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy” is significant. This indicates that the RBI is preparing the economy for tightening monetary policy going forward.
RBI marked down its earlier real GDP growth projection for FY23 to 7.2 per cent from 7.8 per cent, assuming crude oil price at $100 per barrel.
The retail inflation projection for FY23 has been raised to 5.7 per cent from earlier projection of 4.5 per cent, assuming normal monsoon and average crude oil price of $100 per barrel.
As part of its plan to normalise the liquidity corridor, RBI will introduce standing deposit facility at 3.75 per cent. It will be floor of the corridor
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