RBI Monetary Policy Expectations
- Credit Rating Agency in India
- RBI Monetary Policy
- RBI Monetary Policy Expectations
We expect a 40-50 bps hike this June’22 Monetary Policy.
While controlling inflation is a priority now, RBI is also cautious in dealing a balance between demand recovery and inflation control. In the fourth-quarter of 2021-22,the estimated GDP shows a modest 4.1% growth. Another positive is that India’s core 8 sector industries grew at 8.4% in April’22 compared to 4.9% in March’22. Therefore, there is a sign of nascent recovery. A welcome step is that the Government of India (GoI) has taken certain steps to address supply-side inflation (e.g. reduction in petrol and diesel excise duties, customs duty reduction on certain iron & steel products to smoothen out raw material prices and availability etc.) which will compliment and help RBI to address inflation challenges.
During the pandemic, the RBI offered liquidity facilities of the order ?17.2 lakh crore of which ?11.9 lakh crore was utilised. So far ?5.0 lakh crore has been returned or withdrawn on the lapse of various facilities on their due dates. Further, CPI projections have been raised to 5.7% from 4.5% earlier, whereas GDP growth projections are revised downwards to 7.2% from 7.8%.