Highlights from RBI policy meet: Focus shifts on containing inflation

Highlights from RBI policy meet: Focus shifts on containing inflation

Vishwajeet Bhandigare
/ Categories: Trending, Mindshare

The apex bank has kept the interest rates unchanged.

The biggest highlight of today’s RBI policy was that it kept the interest rate unchanged. For the 11th time in a row now since May 2020, the RBI has kept the repo rate and reverse repo rate constant at 4 per cent and 3.35 per cent, respectively, thus maintaining its accommodative policy stance although it has hinted at the withdrawal of this policy soon. 

The apex bank has also expressed inflation estimates for FY23. For the first quarter of June, it expects the inflation to be at 6.3 per cent and an average of 5.7 per cent for FY23. It has also lowered the GDP growth estimate from 7.8 per cent to 7.2 per cent. 

RBI Governor pointed out that although the Indian economy is progressing on its way to revival after the pandemic, the ongoing geopolitical situation in Europe can potentially impede recovery and growth. Hence, the RBI is going to be a little more dynamic in terms of responding to the economic situation. Although it maintained an accommodative stance, analysts believe RBI is making grounds for gradual rate hikes in the next meeting perhaps. 

RBI also introduced a standing deposit facility (SDF) which is a liquidity controlling tool. SDF aims at absorbing excess liquidity such that it allows commercial banks to make deposits with RBI without collateral. It has set the SDF rate at 3.75 per cent. 

The governor also talked about HDFC and HDFC bank merger which he said is under examination. 

To conclude, RBI’s growth-oriented traditional approach is now tilted towards inflation. Inflation has become a primary concern for the apex bank. 

Previous Article Closing Bell: Equity indices end three-day losing trend; all NSE sectoral indices close in green except IT
Next Article Overnight Digest: Stocks likely to be in focus on April 11
Rate this article:
4.5

DALAL STREET INVESTMENT JOURNAL - DEMOCRATIZING WEALTH CREATION

Principal Officer: Mr. Shashikant Singh,
Email: principalofficer@dsij.in
Tel: (+91)-20-66663800

Compliance Officer: Mr. Rajesh Padode
Email: complianceofficer@dsij.in
Tel: (+91)-20-66663800

Grievance Officer: Mr. Rajesh Padode
Email: service@dsij.in
Tel: (+91)-20-66663800

Corresponding SEBI regional/local office address- SEBI Bhavan BKC, Plot No.C4-A, 'G' Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051, Maharashtra.
Tel: +91-22-26449000 / 40459000 | Fax : +91-22-26449019-22 / 40459019-22 | E-mail : sebi@sebi.gov.in | Toll Free Investor Helpline: 1800 22 7575 | SEBI SCORES | SMARTODR