Economic Buzz: India Central Bank Leaves Repo Rate Unchanged

8 Apr 2022 , 11:38 AM

The Reserve Bank of Indias Monetary Policy Committee (MPC), on the basis of an assessment of the current and evolving macroeconomic situation, at its meeting on April 8, 2022 decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0 per cent. The marginal standing facility (MSF) rate and the Bank Rate remain unchanged at 4.25 per cent. The standing deposit facility (SDF) rate, which will now be the floor of the LAF corridor, will be at 3.75 per cent. The MPC also decided to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. The central bank today downgraded its growth outlook for the fiscal year 2022-23 to 7.2 percent from 7.8 percent. At the same time, the bank raised its inflation forecast for the current fiscal year to 5.7 percent from 4.5 percent.

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