Inflation expected to rise to 5.7 pc from 4.5 pc for FY23: RBI Governor

Reserve Bank of Indias RBI Monetary Policy Committee on Friday voted to keep the benchmark repo and reverse repo rates unchanged for the 11th consecutive timeMPC voted unanimously to leave the repo rate unchanged at 4 per cent MPC also voted unanimously to keep the stance accommodative RBI Governor Shaktikanta Das said in his Monetary Policy StatementThe repo rate is the interest rate at which the RBI lends shortterm funds to banksThe reverse repo rate the interest rate at which the RBI borrows from banks remains unchanged at 335 per centInflation is expected to rise to 57 per cent from 45 per cent projected earlier for FY23 the Governor saidNotably the Marginal Standing Facility MSF rate and the Bank Rate have remained unchanged at 425 per cent Das informedWe are confronted with new but humongous challenges Shortage in key commodities fractures in international financial architecture and fear of deglobalisation Extreme volatility characterises commodity and financial markets the RBI Governor said while mentioning that the global economy is witnessing tectonic shifts with the commencement of the war in Europe followed by sanctions and escalating geopolitical tensionsWhile the pandemic quickly morphed from a health crisis to one of life and livelihood conflict in Europe has the potential to derail the global economy Caught in the crosscurrents of multiple headwinds our approach needs to be cautious but proactive in mitigating the adverse impact on Indias growth inflation and financial conditions he saidKeeping the approach cautious but proactive Das said that the RBI is emphasizing on three different aspects which will place India in a position that would enable it to deal with the merging crisis and challengesThe first as the RBI Governor listed was a significant improvement in the external sector Second Foreign Exchange Reserves which are at very comfortable levels Third substantial strengthening of the financial sector Das saidThis is the 11th consecutive policy review when the RBI has decided to maintain a status quo on key policy rates The central bank has not changed repo and reverse repo rates since May 2020Das said the Monetary Policy Committee has also decided to maintain an accommodative policy stanceThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever