RBI keeps policy rates unchanged at 4%; revised FY23 GDP forecast to 7.2%

8 Apr 2022 , 03:13 PM

The Reserve Bank of India‘s (RBI) Monetary Policy Committee (MPC) on Friday has decided to keep the repo rate unchanged in its first bi-monthly policy meeting of FY23. This is the 11th time in a row that the central bank has maintained a status quo on the key policy rate.
The repo rate currently stands at 4 per cent and the reverse repo rate has been maintained at 3.35 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 per cent from 7.8 per cent. At the same time, the bank raised its inflation forecast for the current fiscal year to 5.7 per cent from 4.5 per cent.

The GDP growth for FY23 is now seen at 7.2 per cent while for Q1, it is seen at 16.2 per cent and for Q2, Q3 and Q4, it is seen at 6.2 per cent, 4.1 per cent and 4 per cent, respectively.

All 6 members of the MPC also voted unanimously to keep the monetary stance accommodative, with Jayanth Varma casting his vote in favour.

Further, the central bank extended rationalised risk weights for housing loans until March 2023. Also, starting June 30, 2023, HTM will be restored to 19.5 per cent in a phased manner, Governor Das said.