Views on RBI Monetary policy by Ms. Anagha Deodhar, ICICI Securities
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Below are Views on RBI Monetary policy by Ms. Anagha Deodhar – Chief Economist, ICICI Securities
As expected, the MPC voted unanimously to keep repo rate unchanged and the stance of monetary policy ‘accommodative as long as necessary’. The decision to hold rates came on the back of a difficult backdrop of slowing growth are rising inflation. The MPC upped inflation forecast for better part of FY22 by 20-30bps and lowered GDP growth forecast sharply to 9.5%, mainly due to lower than expected growth in H1FY22. This shows that the committee’s priority is supporting growth recovery. The RBI also announced on-tap liquidity window of Rs 150bn for contact-intensive sectors, additional liquidity facility of Rs 160bn to SIDBI and enhanced the threshold for resolution. Moreover, it announced purchase of government securities worth Rs 1.2trn under GSAP 2.0 in Q2FY22. All these measures together are likely to keep financial conditions in the economy benign and support recovery.
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