Ms. Anagha Deodhar – Chief Economist, ICICI Securities on the RBI Monetary policy

The Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged, in line with expectations. Inflation is projected to ease further in the coming months, potentially paving the way for future rate cuts. The MPC forecasts real GDP growth of 10.5% for FY22, with inflation estimated at 5-5.2% during the first half of the fiscal year. Key regulatory measures announced include a two-phase normalization of the Cash Reserve Ratio (CRR), an extension of the Held to Maturity (HTM) limits for Statutory Liquidity Ratio (SLR) holdings, deferment of the capital conservation buffer, and permission for retail investors to participate in government securities. Overall, the MPC’s stance aims to support growth while maintaining financial stability.