MPC meet: RBI hikes repo rate by 50bps to 4.9%; retains FY23 GDP forecast at 7.2%
Inflation is likely to remain in the upper tolerance band in the first 3 quarters of FY23, says RBI governor Shaktikanta Das.
Inflation is likely to remain in the upper tolerance band in the first 3 quarters of FY23, says RBI governor Shaktikanta Das.
The central bank sharply increased its inflation projection to 5.7% in the financial year 2022-23 from its earlier forecast of 4.5%.
The six-member monetary policy committee maintained an "accommodative" stance "as long as necessary".
In the last year, the long duration debt mutual funds have delivered an average return of 6.01%.
The central bank is expected to keep an accommodative stance, although the monetary policy is expected to have a dampening effect on the market.
The lone dissenter in the MPC believes falling behind the inflation curve could result in harsher monetary steps and loss of credibility.
Varma feels the ability of monetary policy to mitigate the pandemic's effect is very limited as compared to its ability to contain an economic crisis.
While the Reserve Bank of India kept policy rates and its accommodative stance unchanged, additional monetary measures have been brought in to fight the second wave of Covid-19.
The central bank unveils liquidity facility of ₹50,000 crore for access to emergency health services, and ₹10,000 crore for small finance banks’ on-lending, among a slew of measures to fight Covid-19.
The recent surge in Covid-19 infections, the central bank says, adds uncertainty to the outlook on domestic growth as restrictions could dampen demand improvement and delay the return of normalcy.