RBI Monetary Policy Update – What Can We Expect

On Friday, April 8, RBI Governor Shaktikanta Das is going to reveal the first monetary policy of this new financial year. This RBI monetary policy is being reviewed by 6 members of the Monetary Policy Committee, and now this policy will show how RBI is striking a balance between sustaining growth and containing inflationary pressures in the economy in the coming financial year.

We all know how the rise in crude oil and commodity prices during the Russo-Ukraine war has compounded the bad situation of inflation. Come let’s see what we can expect in this coming RBI monetary policy –

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ISS RBI will be the most important currency of monetary policy ‘Inflation and growth improving!’

India’s retail inflation rate is not taking the name of work and according to the data of the National Statistical Office, it had increased to 6.07% in February 2022.

Economists expect the new fiscal year  RBI to lower its retail inflation forecast by 50 to 80 basis points from the current 4.5%, preferably above the 6% average in FY23. One basis point is one-hundredth of a percentile.

According to a research report, RBI will re-evaluate the ISS policy meeting my GDP and retail inflation only and may also say,

‘Inflation pressures are temporary, and will remain below the upper end of the rate comfort zone, and monetary policy should support growth!’

According to economists, the GDP growth estimate, which is a minimum of 6 and a maximum of 7.8%, can also be reduced by 20-40 basis points. After all, it still poses downside risks to development due to the ongoing Russo-Ukraine war.

The next turn will be liquidity

Like we said earlier also RBI sold $20 billion in mid-January and $19 billion in Jan to March quarter, FY22 net liquidity apart from foreign exchange purchases now some 1 lakh crores.

From the traces of the Chief Economist of India, Samiran Chakraborty,

“RBI is tightening its liquidity stance, which is reflected in our Financial Position Index and has been steadily reducing the size of its balance sheet since October.”

The Government Securities Acquisition Program (G-SAP) which was launched last year to buy government bonds and which then scrapped my October may also see a ‘Hi’ monetary policy. If the RBI announces some more open market operations to economists, then the market can get a lot of relief.

The third issue of this monetary policy is most likely ‘unemployment!’

that the crypto bill and its associated 30% tax and 1% TDS has done the worst for everyone.India’s overall unemployment rate in February by 8.1% and in March my 7.6%, from the Center for Monitoring Indian Economy’s History of Monthly data. On April 2, it has fallen to 7.1%. But for a developing country like India, this falling is too much. That is why economists and people have also expected RBI to give priority to development as well as to unemployment.

In this monetary policy, I may also tell some developments about RBI’s digital currency, they also give the timeline of the launch date. No wonder, people are now waiting quite interestingly now


From March 2020, the RBI had lowered its repo rate by some 115 basis points to support the economy. And since then it has remained at the same repo rate, 4% – the rate at which RBI lends money to commercial banks and 3.35% reverse repo rate – the rate at which RBI borrows from banks. This monetary policy has the power to be talked about by raising my repo rate.

In addition, the government has mandated the RBI to keep the inflation rate at 4 per cent (+, – 2 per cent).

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