The RBI governor announced a second consecutive hike in policy rates and highlighted geopolitical risks. Here are the highlights.
Inflation forecast increased to 6.7% for FY23; GDP forecast retained at 7.2%
The Central bank's MPC meet comes in the backdrop of high inflationary concerns and evolving geo-political scenarios, including Russia's invasion of Ukraine
RBI Governor Shaktikanta Das said late last month the bank's primary focus was to bring inflation down closer to target but it could not disregard concerns around economic growth
There are speculations that the central bank may go for at least 35 basis points (bps) hike over and above the 40 bps hike effected last month after an off-cycle MPC meeting
Reserve Bank is likely to increase the benchmark lending rate in quick succession in monetary policy review for which has already been given by Governor Shaktikanta Das, opined experts.
The central bank will likely revise its inflation estimate to 6.2-6.5 per cent, which is way above the upper end of its tolerance band of 2-6 per cent, the economists at Barclays said
In recent times, central bankers have stressed the need to be nimble, humble even. Recent mistakes warrant some humility
Says have entered another phase of 'coordinated action' between fiscal and monetary authorities
At the interbank forex market, the domestic unit opened at 77.69 against the US dollar. It moved in a range of 77.51 to 77.69 during the session
Shaktikanta Das further said in a TV interview that the RBI and govt have entered into another phase of coordinated action to cool down inflation
Shaktikanta Das says RBI wants to raise rates in the next few MPC meetings, at least at the next one in June
The RBI governor said that inflation projection will be realistically given in next monetary policy committee meet due to take place in June
External member Jayanth Varma said 100 bps rate hike required 'very soon'
Urges lenders to take appropriate measures, including raising of capital, to shield their balance sheet against any potential impact these events might have
The MPC 's external member Jayanth R Varma opined that more than 100 basis points of rate increases needs to be carried out very soon
According to latest data, the RBI has conducted open market operations in the last week of April and in the first week of May
Higher interest rates may complicate the financing of a record $200 billion government borrowing programme, bigger than even in the first year of the pandemic.
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