RBI Policy Meet: RBI Decides To Focus On Withdrawal Of Accommodation

The Monetary Policy Committee (MPC) today decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

Overall system liquidity continues in surplus, with average daily absorption under the LAF at Rs 3.8 lakh crore during June-July. Money supply (M3) and bank credit from commercial banks rose (y-o-y) by 7.9 per cent and 14.0 per cent, respectively, as on July 15, 2022. India's foreign exchange reserves were placed at US$ 573.9 billion as on July 29, 2022.

"Since the MPC's meeting in June 2022, the global economic and financial environment has deteriorated with the combined impact of monetary policy tightening across the world and the persisting war in Europe heightening risks of recession. Gripped by risk aversion, global financial markets have experienced surges of volatility and large sell-offs.
The US dollar index soared to a two-decade high in July. Both advanced economies (AEs) and emerging market economies (EMEs) witnessed weakening of their currencies against the US dollar. EMEs are experiencing capital outflows and reserve losses which are exacerbating risks to their growth and financial stability," the RBI has said in a release.