RBI Monetary Policy Live: Shaktikanta Das Spells Out Policy In Seven Points
India's Monetary Policy Committee voted to keep the repo rate unchanged, but the RBI has shifted its focus to inflation control.
India's six-member Monetary Policy Committee voted to keep the repo rate unchanged in its first meeting of the new fiscal, but the Reserve Bank of India has shifted its focus to inflation control. The rate-setting panel also maintained a status quo on the reverse repo rate.
The MPC also remained accommodating in its stance while focusing on withdrawal of accommodation to ensure that inflation remains within the target while supporting GDP growth.
Following the review:
The repo rate stands unchanged at 4%.
The monetary policy stance remains accommodative.
The reverse repo rate is unchanged at 3.35%.
India's inflation forecast revised to 5.7% in FY23.
India's GDP growth projection revised to 7.2% for FY23.
Watch RBI Governor Shaktikanta Das' speech annoucing the MPC decision here. For the key takeaways, click here.
(Corrects an earlier version that misstated the reverse repo rate.)
Has The Central Bank Effectively Raised Rates?
The Monetary Policy Committee voted to keep the repo rate unchanged.
That status quo on policy rates, however, came with a number of 'buts'.
Stripped of all those complexities, the effective takeaway is this—the Reserve Bank of India has raised rates and is now more worried about inflation than growth. (read more)
RBI Ready To Launch Pilot Projects For Digital Rupee
The Reserve Bank of India is in position to start off with pilot projects on its central bank digital currency, or digital rupee, Deputy Governor T Rabi Sankar says.
"[We] Will start with a calliberated approach, in a non-disruptive manner," Sankar says. "...will probably start with the wholesale piece since it is easier to implement."
T Rabi Sankar On Payment Disruptions Due To Ukraine War
"Industry groups and banks are talking to us about the trade payment disruptions due to the Ukraine war," RBI Deputy Governor T Rabi Sankar says. "We are still discussing options... Once we have arrived at a solution, you will come to know about it."
M Rajeshwar Rao On KYC Issues At Regulated Entities
The Reserve Bank of India is internally looking at the know-your-customer issues at regulated entities, Deputy Governor M Rajeshwar Rao says.
"We will continue to monitor the developments... If any action is necessary, [it] will be taken," he says. "...have to ensure that any actions taken by the RBI are taken under PMLA (Prevention of Money-Laundering Act) rules."
RBI's Das On The HDFC Merger
The Reserve Bank of India has received a proposal from HDFC Ltd. and HDFC Bank Ltd. for their proposed merger, Das says.
"The proposal is under consideration. We will examine it under prevailing guidelines," he says. "Once a decision is taken we will be making the appropriate announcements."
