RBI Cuts GDP Growth Estimate At 7.2%, Inflation forecast for FY23 At 5.7%

RBI, the central bank of India announces its monetary policy today. RBI Governor Shaktikanta Das announces GDP Growth estimate for the current fiscal (FY2022-23) to 7.2%. Earlier the estimate was at 7.8%. High inflation-rising prices of commodities along with tightening interest rates in the global picture have influenced the bank to take this decision. In addition to that, RBI has also hiked its inflation forecast for FY23 to 5.7%.

The RBI has also kept the repo rate at 4%, and the reverse repo rate at 3.35%, unchanged, continuing its accommodative stance on the monetary policy. For the last 10 MPC meetings, RBI is keeping these two rates unchanged.

Additionally, according to Das, the bank is assuming the crude oil rates can be at $100/barrel for 2022-23. Emkay Global in an official statement mentioned earlier, "Brent is up more than 25% (peaking at 44% from Feb policy) owing to the Russia-Ukraine conflict, and the global energy order is changing. While commodity supply is no longer secure, risk premia have lifted the entire commodity price complex (including agri). As we parse the impact of higher energy and commodities, we understand the uncertainty is high and the situation is still fluid, and macro assessments might require frequent adjustments ahead from the policy perspective." The next bi-monthly monetary policy of 2022-23 will be organized during June 6-8, where the bank will decide its monetary policy further.

(Also read: RBI Monetary Policy: Repo Rate Unchanged At 4%, Stance Remains Accommodative)