RBI continues to prioritize growth and has recognized the threat of heightened inflation: Federal Bank

8 Apr 2022 , 03:19 PM

The MPC decided to continue with the “accommodative” stance in the backdrop of elevated level of inflation and heightening geo-political tensions. They reiterated a gradual, calibrated withdrawal of liquidity in a non-disruptive manner.

Growth is projected to be lower (7.2%) and inflation higher (5.7%) as compared to February outlook. The current outlook assumes crude oil price at $100/barrel.

RBI has restored the Liquidity Adjustment Facility (LAF) to 50 bps, which is an indication of moving away from loose monetary policy. They have introduced Standing Deposit Facility  (SDF) which will form the floor of the LAF corridor.

In summary, RBI continues to prioritize growth and has recognized the threat of heightened inflation, said Venkatraman Venkateswaran, Group President & CFO, Federal Bank.