RBI Raises Inflation Forecast To 5.7%, Keeps Repo Rate Unchanged. Here’s What Uday Kotak Has To Say

The CEO of Kotak Mahindra Bank tweeted about the decisions taken by the RBI.

In its first monetary policy announcement for 2022-23, the Reserve Bank of India (RBI) has raised its inflation forecast to 5.7 percent against the previous estimate of 4.5 percent. Rbi policy:Sharp increase in inflation estimate to 5.7% from 4.5% assuming 100$ oil.Exit q4 fy23 estimate 5.1%. Present Repo rate at 4%. If India has to move to 0% real rate that is inflation - interest rate =0, we need 1% increase of rates. 4 rate hikes of a quarter each?

The RBI has revised its inflation projections upwards and sharply cut its growth projections for the economy in the current financial year due to increased geopolitical tensions since the end of February, which poses a downside risk to domestic growth and upside risk to inflation projections. 

The Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, held its first meeting in the current financial year a few days ago.

The RBI's MPC, however, kept the benchmark repo rates unchanged at the current level of 4 percent.