The Monetary Policy Committee (MPC) of RBI in its meeting today decided to increase the policy Repo rate under the Liquidity Adjustment Facility (LAF) by 40 basis points from 4.00 percent to 4.40 percent with immediate effect.
Consequently, the standing deposit facility (SDF) rate and marginal standing facility (MSF) rate stand adjusted from 3.75 percent to 4.15 percent and from 4.25 percent to 4.65 percent respectively, with immediate effect.
All other terms and conditions of the extant LAF Scheme will remain unchanged.
The current policy rates after the above changes are as under.
CRR (Cash Reserve Ratio)effective from the fortnight beginning May 21, 2022 | 4.50% |
SLR (Statutory Liquidity Ratio) | 18.00 % |
Repo Rate | 4.40% |
Reverse Repo Rate | 3.35% |
SDF | 4.15% |
MSF Rate (Marginal Standing Facility Rate) | 4.65% |
Bank Rate | 4.25% |
RBI has revised the FY23 GDP forecast to 7.2% from the earlier projection of 7.8%. The MPC also decided to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward 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 percent within a band of +/- 2 percent while supporting growth, RBI said.
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