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The risk of global shocks remains! Colin Shah   In a Monetary Policy Statement, 2023-24 Resolution of the Monetary Policy Committee (MPC), on the basis of an assessment of the current and evolving macroeconomic situation, the MPC at its meeting decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent. The standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth.  These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.    On the RBI policy perspective, Colin Shah, MD, Kama Jewelry expressed that, “the RBI's decision to ho...

MSF rate and the Bank Rate to 4.65 per cent . RBI said, as the war draws on and sanctions and retaliatory actions intensify, shortages, volatility in commodity and financial markets, supply dislocations and, most alarmingly, persistent and spreading inflationary pressures are becoming more acute with every passing day. Debt distress is rising in the developing world amidst capital outflows and currency depreciations. Recent GDP releases suggest that the global economic recovery is losing pace.   By announcing the Decisions and Deliberations of the Monetary Policy Committee (MPC), RBI Governor Shaktikanta Das said, “against this backdrop, the Monetary Policy Committee decided to hold an off-cycle meeting on 2nd and 4th May, 2022 to reassess the evolving inflation-growth dynamics and the impact of the developments after the MPC meeting of April 6-8, 2022.” Based on this assessment of the macroeconomic situation and the outlook, the MPC voted unanimously to increase the policy rep...

Challenges yet to inflation and inflationary outlook Dr. Sunil Sinha, Principal Economist, India Ratings and Research (Fitch Group) expressed view on  RBI's Fifth Bi-monthly Monetary Policy Statement 2018-19 says, as expected RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5%. Although RBI has lowered its CPI inflation projection to 2.7%-3.2% in H2:2018-19 and 3.8%-4.2% in H1:2019-20 as against its earlier projection of 3.9%-4.5% in H2:2018-19 and 4.8% in Q1:2019-20, it still believes that there are challenges to inflation and inflationary outlook.   These could emanate from (i) volatility and sudden spike in prices of perishable food items, (ii) risk from revision in minimum support prices (MSPs) which has yet not played out fully, (iii) crude oil prices due to geo-political tensions/decision of OPEC to cut production, (iv) volatility in global financial market, (v) fiscal slippages and (vi) staggered impact of HR...

India to grow at 7.4% in 2018-19 LAF unchanged at 6.5 per cent Finance Ministry Statement on Fifth Bi-monthly Monetary Policy Statement, 2018-19 Resolution of the Monetary Policy Committee, Reserve Bank of India issued, on the basis of its assessment of the current and evolving macroeconomic situation, decided to keep the Policy Repo Rate under the Liquidity Adjustment Facility (LAF) unchanged at 6.5 per cent. The MPC has, however, retained its stance of ‘calibrated tightening’.     The GDP growth projection for 2018-19 is retained at 7.4 per cent as in the Fourth Bi-monthly Resolution in October, 2018.  The projections of inflation for 2018-19 and Q1:2019-20 have been substantially revised downwards from the October resolution. The Secretary, Department of Economic Affairs, Shri Subhash Chandra Garg in a Statement said that the assessment of the MPC for growth and inflation outlook is consistent with the Government’s assessment of inflation and g...