On February 10, 2022, RBI’s Monetary Policy Committee (MPC) kept key interest rates unchanged. It retained the accommodative stance in its first policy after Union Budget 2022.

Key Facts

• This is the tenth consecutive time that, MPC has maintained the status quo.
• The three-day RBI MPC meeting started on February 8, and concluded on February 10.
• Last MPC was held in December 2021, keeping benchmark interest rate unchanged at 4 percent. It decided to continue with its accommodative stance amid the emergence of new coronavirus variant Omicron.

Key decision of the MPC

• MPC kept the repo rate as well as reverse repo rate unchanged, respectively at 4 percent and 3.35 percent.
• It continued with the ‘accommodative’ stance in the backdrop of high inflation.
• RBI projected GDP growth for Financial Year 2023 at 7.8 percent.
• Real GDP growth of 9.2 percent in Financial Year 2022 (FY 2022) will take economy above pre-pandemic level.
• CPI inflation forecast for FY 2022 has been kept at 5.3 percent. It is expected to reach 4.00 percent target in second quarter of FY23.
• Rupee has shown resilience in light of global spill-overs.
• Current account deficit was below 2 percent of GDP in FY22.
• It proposed to increase the Cap of e-vouchers, from Rs 10,000 to Rs 1 lakh.