RBI Monetary Policy 2022 April: MPC meeting outcome, highlights, review summary – What Governor Shaktikanta Das announced

RBI Monetary Policy 2022 April: In a major development, the Reserve Bank of India (RBI) on Friday kept the benchmark interest rate unchanged at 4 per cent and going forward decided to withdraw its accommodative stance to ensure that inflation remains within the target level.

This is the 11th time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained the status quo. The central bank had last revised its policy repo rate or the short-term lending rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting the interest rate to a historic low.

The MPC, based on its assessment of the macroeconomic situation and outlook, voted unanimously to keep the policy repurchase (repo) rate unchanged at 4 per cent, Das said while announcing the bi-monthly monetary policy review.

The committee also decided unanimously to remain accommodative while focusing on withdrawal of its current stance to ensure that inflation remains within the target band going forward, he said.

Consequently, the reverse repo rate will continue to earn 3.35 per cent interest for banks for their deposits kept with the RBI.
Das further said the marginal standing facility, MSF rate and bank rate, remain unchanged at 4.25 per cent.

The RBI slashed the growth projection for the current fiscal to 7.2 per cent from 7.8 per cent earlier; while raising the inflation forecast to 5.7 per cent from 4.5 per cent.

The MPC has been given the mandate to maintain annual inflation at 4 per cent until March 31, 2026, with an upper tolerance of 6 per cent and a lower tolerance level of 2 per cent.

The bi-monthly policy comes against the backdrop of the Budget wherein a nominal gross GDP of 11.1 per cent has been estimated for 2022-23.

The government expects this growth to be fuelled by a massive capital spending programme outlined in the Budget with a view to crowd-in private investment by reinvigorating economic activities and creating demand.

Finance Minister Nirmala Sitharaman raised capital expenditure (capex) by 35.4 per cent for the financial year 2022-23 to Rs 7.5 lakh crore to continue the public investment-led recovery of the pandemic-battered economy. The capex in the current financial year is pegged at Rs 5.5 lakh crore.

The spending on building multi-modal logistics parks, metro systems, highways, and trains is expected to create demand for the private sector as all the projects are to be implemented through contractors. 

RBI Monetary Policy 2022 April: MPC meeting outcome, highlights, review summary – What Governor Shaktikanta Das announced

WATCH VIDEO: Monetary Policy statement by Shaktikanta Das, Governor, Reserve Bank of India

-Economy is confronted by new and humongous challenges: RBI Governor Shaktikanta Das

-Indian economy comforted by large forex reserves; RBI stands ready and resolute to defend economy: Das

-RBI keeps benchmark lending rate unchanged 11th time in a row at 4 pc

-RBI revises its stance to less accommodative to revive, sustain growth and contain inflation: Das

-MPC decides to keep reverse repo rate unchanged at 3.35 pc: RBI Governor

-Expected benefits from ebbing of Omicron wave offset by escalation in geopolitical tensions: RBI Guv

-Indian economy is steadily reviving from pandemic-induced slowdown, says Das

-Global crude oil prices remain volatile at elevated levels: RBI Governor Das

-War could impede economic recovery; RBI cuts growth projection to 7.2 per cent for FY23: Governor Das

-Sharp pump prices may push inflation; edible oil prices to remain at elevated level in near future: Das

-Robust rabi crop should support rural demand; pickup in contact-intensive services to help boost urban demand: Das

-Inflation is expected to rise to 5.7 pc from 4.5 pc projected earlier for FY23: Das

-RBI will continue to adopt nuanced, nimble approach to liquidity management while ensuring adequate liquidity in system: Das

-RBI will engage in gradual, multi-year withdrawal of Rs 8.5 lakh crore excess liquidity in system: Governor Das

-RBI to maintain orderly financial condition in market and will take steps to contain impact of global spillovers: Das

-RBI to review customer services; cardless cash withdrawal from ATMs extended to all banks using UPI: Das

-RBI says it is not hostage to any rule book, will use all available tools to defend Indian economy

Industry Reactions to RBI MPC

.Dinesh Khara, Chairman, SBI

 

“The RBI monetary policy announcement is a pragmatic assessment of the current uncertain economic environment. The RBI has rightfully re-calibrated the growth and inflation numbers and announced a slew of measures to support the government borrowing program in a non-disruptive manner. The measures to allow inter-operability in card-less withdrawal at banks will give a further impetus to QR code-enabled payments. The decision to set up a robust governance structure for digital payments is a logical corollary of this move. Overall, the policy announcement now prepares us for a world after COVID.”

 

 Sampath Reddy, Chief Investment Officer, Bajaj Allianz Life Insurance

 

“Even though RBI has maintained the accommodative stance and kept the benchmark rates unchanged the policy is likely to result in upward movement in yields. The higher inflation projection and shifting of policy corridor to SDF would lead to higher bond yields.”

 

Prasenjit K. Basu – Chief Economist, ICICI Securities

 

“The MPC sensibly decided to keep monetary policy accommodative despite inflation being marginally above its tolerance band. Two good reasons justify the policy: (a) inflation is high partly because of (external) supply shocks, so reducing aggregate demand (through monetary tightening) will not address the issue; (b) there is a considerable output gap, with the economy having contracted 6.6% in FY21, and estimated to have grown 8.9% in FY22 (far from closing the gap, in an economy with potential growth of 7% annually). Staying accommodative is thus the right approach: loan growth needs to accelerate to enable a rebound in domestic demand, but the RBI will also withdraw accommodation tactically if inflation gets too far from the target.”

 

Dr. Ravi Singh, Vice President and Head of Research, Share India 

 

“RBI monetary policy has fallen much within the expectations of a dovish stance in view of the current crisis and maintains it’s pro-growth outlook. The geopolitical scenario on the global front and soaring inflation have led the RBI to lower its growth forecast to 7.2 per cent from 7.8 per cent and an increase in the inflation forecast for the current FY. However, the strong Indian forex reserves and a stable financial sector is providing some relief to the dismay. The unchanged repo rate will provide more elbow room to the homebuyers and helps in the revival of the realty sector. To curb the uncontrollable inflation, RBI has increased the reverse repo rate and sharp increase in the inflation projection has hinted towards a possible tightening in the near future.”

 

Subhash Goel, Chairman & MD, Goel Ganga Developments 

 

“RBI’s effort to keep the repo rate unchanged and maintain an accommodative stance is a welcoming step. This will continue to keep the home loan rates in the lower band, thereby fostering growth and pushing the market in a positive direction. Lowered home loan rates will also help renewed investor interest in the sector, as real estate is a prudent option for risk-averse investors.  Meanwhile, the governing agencies should try to control inflation, otherwise, raw material prices will jump upwards and affect the industry.” 

 

Indranil Pan – Chief Economist, YES BANK on the RBI Monetary policy announced today

 

“Amidst the ‘tectonic’ shifts in global conditions, RBI has taken more than one step towards preparing the market for an eventual increase in the repo rate. This position is made clear as the governor indicated that the order of preference for RBI now is inflation, growth and financial stability, rather than the post COVID-19 preference of preserving and supporting growth momentum. The process of neutralizing monetary policy had already started with withdrawal of ultra-comfortable liquidity. In this policy, the operative rate was increased by 40bps with the institutionalization of the Standing Deposit Facility. With this, RBI has almost buried the reverse repo as an instrument. Towards the objective of an orderly completion of the government’s borrowings, the HTM limit was increased by 1% to 23%. Overall, we now expect the stance to be made ‘NEUTRAL’ in June and the first repo rate increase can come through in August.”

 

George Alexander Muthoot, Managing Director at Muthoot Finance.

 

“The RBI policy on expected lines kept key rates unchanged and maintained ‘accommodative’ stance, while focussing on withdrawal of accommodation to ensure inflation remains within the target zone while supporting growth. The RBI has revised inflation projection upwards and FY23 GDP growth downwards to 7.2% (from earlier projection of 7.8%). While there is an uncertainty evolving around geopolitical tensions, high global crude oil prices are likely to keep input cost pressure elevated, however, there is still rising consumer confidence and an optimistic business confidence.We are seeing improved demand both in urban and rural economy and more so the robust Rabi output is expected to support rural demand. The huge investments announced in capital expenditure in this year’s budget and overall easy financial conditions are expected to support the economic revival. We welcome RBI’s extension of support towards individual housing loan segment”

 

Umesh Revankar, Vice Chairman & MD, Shriram Transport Finance 

 

“The RBI Governor monetary policy statement today highlighted concerns over inflation and downside risks to growth emerging on account of escalation in geopolitical tensions, protracted supply disruptions. The RBI kept key rates unchanged on expected lines and the MPC committee decided to remain ‘accommodative’ while focussing on withdrawal of accommodation to ensure that inflation remains within the target, while supporting growth. The RBI revised FY23 GDP growth downwards to 7.2% (from earlier projection of 7.8%) and hiked Inflation projections to 5.7% for FY23 (from earlier projection of 4.5%). While the RBI is going to focus on calibrated withdrawal of liquidity, the Governor reiterated the commitment to ensure availability of adequate liquidity for productive requirements of the economy. The uncertainty evolving around geopolitical tensions, high global crude oil prices are likely to keep input cost pressure elevated and hence pose challenges for the economy. We now expect possible rate hike by the RBI in 2HFY23, although in a calibrated manner. CV sales have improved in Q4 and we remain hopeful of pick up in Investment activity due to continuing support from government capex and easy financial conditions. While we are seeing signs of recovery in the MHCV segment and revival in CV demand, we now also will be vigilant about the impact of continued high crude oil prices on the CV sector. RBI extension of support for individual housing loans is welcome, and we reiterate the need for continuous support for MSMEs as they are in revival mode.”

 

Rajiv Sabharwal, MD & CEO, Tata Capital Ltd. 

 

“• RBI keeps the rates  unchanged and continues with its accommodative stance. This shows RBI’s resolve to support durable growth. This comes at the backdrop of the prevailing geopolitical complexities, increased global disruptions and the crude oil shock. Further, RBI lowers the growth estimates for FY 23 which reflects the downside risks and evolving uncertainties. 

 

The inflation trajectory is showing a strong northbound bias. The expectation of softening the core inflation was derived from moderation of food inflation has been dissipated by the volatile crude prices, currency pressures and elevated input cost. The RBI will closely monitor emerging data points.

 

With the introduction of the Standing Deposit Facility (SDF), the RBI has restored the LAF corridor to pre-pandemic levels. The SDF will be put to use for liquidity absorption and comes as an additional tool for the overall liquidity management framework. 

 

The extension of rationalised risk weights for individual housing loans till March 2023 will incentivize the flow of credit in the economy.”

 

Ravi Singhal, Vice Chairman, GCL securities Limited 

 

“RBI monetary policy is as expected, with the accommodative stance remaining in place. However, the reverse repo rate has been raised, sucking liquidity from the market, but the outlook remains positive because the accommodative stance remains in place.”

 

Ridhima kansal, Director, Rosemoore 

 

“The step by RBI to keep the repo rate unchanged is a prudent initiative, as it will enable banks to continue offering credit at low rates, thereby helping retail consumption. With receding cases, expansive vaccination drives, and a healthy economic outlook, India’s retail sector looks upbeat in FY 23. Meanwhile, the government should try to control inflation, because if not rein, it can soften demand.” 

 

Manoj Dalmia, Founder and Director, Proficient Equities Private Limited

 

“As per RBI announcement, Repo Rate has been kept unchanged at 4 percent. Reverse repo rate at 3.35 percent will also remain unchanged. Repo Rate was last cut on 22nd May 2020 because of covid-induced lockdown which had a nationwide affect. Rates remains at a historic low of 4 percent since then. RBI Governor said projected growth of GDP for FY 2023 is at 7.3 %. 7.8 % was previously projected. Escalating geopolitical tensions has taken a toll on India’s growth prospects. This is keeping in mind that oil remains at 100 dollars per barrel. Inflation is projected at 5.7 percent higher than previous expectation of 4.5 percent.” 

 

 YS Chakravarti, MD & CEO, Shriram City

 

“The RBI has maintained its accommodative stance, but the withdrawal of the accommodation in the next 3-4 months is inevitable. RBI has raised its inflation and lowered its growth forecast given the global uncertainty looming that will have a dual impact on growth & inflation in FY23. The re-introduction of the standing deposit facility (SDF) rate at 3.75% as a tool to pull out surplus liquidity will mean that at a system level banks and in turn NBFCs may have to borrow at a slightly higher rate, although the SDF will only be applicable to overnight deposits. Deposit rates have already started moving higher, and with a lag, lending rates may move up in 1H FY23. The housing loans risk weight guidelines getting extended for another year will put more capital in the hands of home financers and boost retail home loans.”

Y. Viswanatha Gowd, MD & CEO of LIC Housing Finance

“With visible signs of normalization coming back and the Reserve Bank of India (RBI) consecutively keeping the repo rate unchanged, there will be the sustenance of demand for the housing loan market. The announcement regarding the rationalization of risk weights for individual housing loans which will be extended till March 31, 2023, is great news for lenders and will ensure credit flow to the sector. The policy support from the government continues to provide thrust and we expect FY23 to witness an inflow of homebuyers and increased construction activity as the market sentiments maintain a positive trajectory.”

Shanti Lal Jain, MD & CEO of Indian Bank

“By maintaining its accommodative stance and unchanged policy rates, RBI once again indicated that economic growth is its primary objective. RBI has brought in several measures to manage the liquidity in the system and keep reigning inflation under control while sustaining the economic growth. 

Announcement of Standing Deposit Facility (SDF) with floor at 25 bps below Repo rate (presently 3.75%) for absorbing the liquidity and ensuring financial stability is a welcome move. 
Extending applicability of Risk Weight guidelines of individual housing loans till Mar’23, enhanced limits under HTM category from 22% to 23% in SLR holdings would help the Banks in improving their credit flow to housing segment and for effective management of their liquidity, respectively. 

The proposal to make available Cardless Cash withdrawal facility across all the Banks and ATM networks using UPI will give further fillip to the digital push.
In this policy, RBI has brought in several measures to achieve the twin objectives of economic growth and inflation control.”

Mohit Ralhan, Managing Partner at TIW Capital Group

“The merger of HDFC Twins has been expected for a long time but it took market participants by surprise today resulting in a significant increase in the share price of both companies as soon as the market opened. This merger has created a financial behemoth, which is still expected to grow at 20%+ rates and may create better profitability with cost synergies. This is also good news for customers with consolidation of services under one entity. RBI has been tightening up the regulatory framework for NBFCs and therefore the pros of keeping Bank and NBFCs as separate entities were diminishing. It looks like an excellent move benefitting all stakeholders which was also quite successfully kept under wraps till the actual announcement.”
 

Ram Raheja, Director at S Raheja Realty

“RBI’s move to keep repo rate and reverse repo rate unchanged contain inflation and maintain liquidity will help in keeping the sentiment optimistic. For the real estate sector, the pandemic followed by the current global political crisis is a silver lining. Being a tangible asset and safe haven investment, people will continue to divert their funds to real estate. Residential real estate will witness a further impetus due to overall uncertainty leading people to return to focus on basic requirements like spacious living spaces. Investors will be closely watching the geopolitical conditions to further estimate growth and evaluate investment avenues.”

Shiv Parekh, founder, hBits 

 

Investors can benefit from lower home loan interest rates, which are here to stay for now. At the same time liquidity in the system will keep up the momentum in the housing loan segment. No doubt, unchanged rates will encourage investors to invest in housing properties, however commercial real-estate has not only held grounds but has also given good returns to investors. With Ukraine crisis stabilising, commercial real-estate will also become lucrative and we expect more and more grade A properties to come up for investment through fractional ownership.

 

 

Mahendra Jajoo, CIO, Fixed Income, Mirae Asset Investment Managers

 

“Taking cognisance of developments in global monetary policy setting and geopolitical situation, since last monetary policy, RBI has activated the sunset clause on special measure during covid time. Recent spike in food, fertilizer, energy and other commodity prices due to ongoing geopolitical conflicts has led to a massive revision upwards in inflation projections for FY 23 to 5.70% now vs 4.50% at the previous meeting. While the growth projections have also been revised down from 7.8% to 7.2% , the focus is now seen gravitating toward pre-emptive action towards any possible flare up in inflation expectations. After an exemplary handling of covid related disruption in last two years, RBI is yet again seen acting just at the right moment on a forward looking approach to arrest inflationary pressures.

 

While the market has already priced in some of the current measures, the policy normalization will likely lead to further inching up of the yields. Given a large borrowing program, policy interventions at appropriate junctures would likely ensure a non-disruptive and orderly evolution of the yield curve going forward.”

 

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE and Chairman, CII Northern Region

 

“Given the global headwinds, we welcome the RBI’s continuation of accommodative stance as well as its decision to maintain the repo rate at 4% as it will ensure liquidity in the country which will further pump-up investor sentiments. The continuation of the current repo rate regime would ensure that home loan rates remain low, leading to continued buyer interest in the residential sector. This would come as a breather for developers who are facing rising construction costs.”

 

 

Aditya Kushwaha, CEO and Director, Axis Ecorp

 

After being jolted by the pandemic, the Indian economy had started making steady progress. All through the pandemic, RBI has taken a pro-growth stance and maintained the same in today’s MPC meeting as well. It comes as no surprise that RBI has decided to maintain the status quo on the rates. We believe that continuing with the same rates will help sustain the demand momentum in the real estate sector. Access to home loans at affordable rates will help in improving the market sentiment and more people will be open to evaluating real estate as a good investment option.

 

Vinit Dungarwal, Director, AMs Project Consultants Pvt. Ltd.

 

RBI in its MPC has tried to address the concerns regarding inflation and challenges due to the current geopolitical situation. The RBI has increased its inflation rate by 120 bps, to 5.7% and kept the repo rates unchanged. By doing this, they are trying to maintain a balance between growth and inflation. The real estate companies are already facing the heat due to the rising raw material prices. By holding the interest rates, RBI is trying to incentivise people to continue to invest in real estate. It has also announced that it will continue to link home loans only with loan-to-value (LTV) ratios for new home loans till March 31, 2023. Keeping the rates untouched and linking home loans to LTV are positive steps for the real estate sector and help in short term demand creation.

 

Puneet Pal, Head-Fixed Income, PGIM India MF

 

RBI starts the monetary policy normalization by introducing SDF (Standing Deposit Facility) as the floor for its money market operations or Liquidity Adjustment Facility (LAF) at 3.75%.  RBI has increased its inflation forecast to 5.70% which is more than what the market was expecting. They have also reduced the growth forecast to 7.20% while increasing the held-to-maturity (HTM) for banks to 23% till March 2023. We read this policy as hawkish as compared to market expectations and expect the yields to drift higher across the curve. We expect the curve to flatten going forward but given the uncertain and volatile times suggest that investors stick to low duration funds.

 

 

Madhavi Arora, Lead Economist, Emkay Global Financial Services.

 

RBI MPC: Letting go of ultra-accommodation

 

■ The RBI has finally crawled towards change in policy stance by being “less accommodative” even as it kept the policy repo rate unchanged with a unanimous vote. The move towards the stance adjustment has come from adding overnight SDF as a new instrument to liquidity management framework at – 25bps of repo rate to absorb liquidity, symmetric with MSF rate  which is at +25bps higher than repo rate. 

 

However, RBI also maintained that they will continue to adopt nuanced and nimble approach to liquidity management even as they more towards normalisation going ahead.

 

■ We had argued in our thought piece a quarter ago that time is ripe for SDF introduction,  which would not only alleviate the collateral constraint but if effectively used, could have multiple benefits in policy flexibility on financial stability and for banking sector as well. 

 

The journey from current ~Rs8tn+ system liquidity to a pre-Covid Rs2tn+ will be a long-drawn one and new tools like SDF will be needed to manage durable liquidity/any idiosyncrasies amid collateral constraints under VRRRs.

 

■ That said, the fixed reverse repo rate (FRRR) at 3.35% , even though adds a lower overnight bias to policy corridor, now becomes largely redundant as now it is going to be used at the discretion of the RBI. Nutshell, the move would ensure the call money rate would eventually edge towards the new effective corridor of 25bps -/+ Repo rate.  

 

■ Amid new macro realities, the inflation forecast has been made more realistic at 5.7% from 4.5% earlier (Emkay: 5.8%+) with Brent at $100/bbl and higher commodity complex in general, which again adds bias to their move towards policy rationalisation. The growth looks to be printing the lows of 7.2%, with further persistent slack.  Inflation has been given more priority over growth

 

■ Overall, the policy calibration is well appreciated  — crawling towards withdrawal of “ultra accommodation”,  with policymakers making the liquidity normalisation long drawn multi-year process. However with reaction function pivoting back towards inflation over growth as policy priority, the policy bias is clear.  

 

Thus, to that extent RBI no longer remains a stout dove and the reaction function  is now evolving with fluid macro realities.

 

 The policy change in stance could formally change in the following policy, even as the RBI crawl gradually towards normalisation of liquidity. This also raises chances of rate hike commencing from Aug policy.

 

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE and Chairman, CII Northern Region

“Given the global headwinds, we welcome the RBI’s continuation of accommodative stance as well as its decision to maintain the repo rate at 4% as it will ensure liquidity in the country which will further pump-up investor sentiments. The continuation of the current repo rate regime would ensure that home loan rates remain low, leading to continued buyer interest in the residential sector. This would come as a breather for developers who are facing rising construction costs.”

 Dhaval Ajmera, Director, Ajmera Realty & Infra India Ltd 

 

“We welcome RBI maintaining its status quote on the repo rate. This is an assertive move despite domestic inflationary pressures and an uncertain global geopolitical environment. With an objective to manage liquidity, RBI has kept the reverse repo rate unchanged by 3.35%. Real Estate being one of the rate sensitive sectors, welcomes the status quo. We expect demand side buoyancy to remain on the back of continuing lower housing loan rate.”

 

 Raghvendra Nath, Managing Director,  Ladderup Wealth Management 

“Lower growth forecast, raising inflation forecast and a spike in commodity prices due to the on-going geopolitical unrest, does not come as a surprise. In order to maintain current growth environment, RBI has continued with an accommodative stance. However, with a caveat, that it might withdraw its accommodative stance to ensure inflation remains within the target level. If RBI follows the path of Western Central banks and raises rates, then the existing capex plans in pipeline might be impacted.”

Shishir Baijal, Chairman & Managing Director at Knight Frank India.

WELCOME RBI’S STANCE TO MAINTAIN REPO DESPITE PRESSURES

Despite the disruptions from geo- political challenges as well as inflationary pressures, the RBI recognises the need to maintain economic growth momentum. We welcome the RBI’s continued accommodative stance and status quo on REPO rate. For the real estate sector, low interest rates for a long period of time has served as a key catalyst for the resurgence of demand.  The status quo on REPO rates will help maintain the current demand levels as interest rate for both homebuyers and developers are likely to be maintained by financial institutions.

Madan Sabnavis, Chief Economist, Bank of Baroda

“The credit policy has surprised the markets with aggressive changes in projections for both GDP and inflation. For GDP growth it is 7.2% (Bank of Baroda: 7.4-7.5%) while inflation has been increased to 5.7% (Bank of Baroda: 5.5-6%). There is a clear hint that the accommodative stance though retained will change as there will be a gradual withdrawal of liquidity keeping in mind the trends in inflation. The interesting introduction of the SDF notwithstanding the high level of bonds held by RBI does indicate that the overnight reverse repo would no longer be attractive as the SDF gives higher return. These are clear indications of the repo rate being increased during the course of the year and we do expect at least 50 bps increase this year. The markets have already reacted with the 10-year bond going up past 7% and we expect the rate to go up to 7.25% this year.”

DRE. Reddy, CEO and Managing Partner at CRCL LLP

RBI’s accommodative stance is a welcome move to revive and sustain growth. While the Indian economy is steadily reviving from pandemic led contraction, recent geo-political tensions has led to increase in price of the several commodities such as oil and natural gas, wheat and corn, edible oil, fertilizer, milk, chicken, poultry. The ongoing conflicts has brought in risk of slow growth and higher inflation. Given the scenario of increasing food and crude oil prices, we may see prolonged supply disruptions which will further harden food prices globally. Sharp increase in international prices implies increase in rates across manufacturing, agriculture and services.

Nish Bhatt, Founder & CEO, Millwood Kane International

“ The current RBI policy did not have any surprises, it kept rates unchanged for the 11th straight policy. But it has clearly laid out the path to policy unwinding. The focus from now on will be to withdraw the accommodative policy stance to keep inflation in check. Today’s announcement clearly indicates the end of easy monetary policy by RBI, the same reflected well on the 10-Year benchmark yield which hit a multi-year high.

The unwinding of liquidity will create some turbulence, and the likely reason for RBI to lower the growth rate projection for FY23 to 7.2%, inflation aim hiked to 5.7% from 4.5% earlier. The clear aim of the central banks worldwide is to control inflation, unwind easy liquidity and focus on slow and steady growth.”

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