RBI decision to keep key policy rates unchanged will aid the initial recovery: TFCI

11 Apr 2022 , 10:52 AM

The central bank left the repo rate unchanged at 4% and reverse repo rate at 3.35%. Unless RBI keeps a hawkish stance, it will not augur well for the emerging economy. Given that the Growth forecast has been lowered from 7.8% to 7.2%, a rate hike seems inevitable going forward, owing to the risks from burgeoning inflation levels and the ongoing geopolitical tensions. With the widening of CAD, and volatile international commodity prices the central bank is expected to acknowledge this and raise its inflation forecast significantly.

The Reserve Bank of India’s decision to keep key policy rates unchanged will help in aiding the initial recovery being witnessed lately. However, the Central Bank has a thought task ahead, given that, it has to strike a fine balance between inflation and growth.

-Mr. Anoop Bali​, ​Whole Time Director & CFO, TFCI