RBI Monetary Policy Key Takeaways 2022-23

Press Release: 2022-2023/38, Dated: 08.04.2022

The Monetary Policy Committee (MPC) at its meeting on April 8, 2022, decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0%. The marginal standing facility (MSF) rate and the Bank Rate remain unchanged at 4.25%. The standing deposit facility (SDF) rate, will be at 3.75%. These decisions are in harmoniousness intending to achieve the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%.

MPC quoted that looking ahead, the inflation trajectory will depend critically upon the evolving geopolitical situation and its impact on global commodity prices and logistics. On food prices, domestic prices of cereals have registered increases in sympathy with international prices, though record foodgrains production and buffer stock levels should prevent a major flare-up in domestic prices. Elevated global price pressures in key food items such as edible oils, and animal and poultry feed due to global supply shortages impart high uncertainty to the food price outlook, warranting continuous monitoring.

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. The next meeting of the MPC is scheduled during June 6-8, 2022.

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