13 JUN,2022 | MEDC
Macroeconomic adjustments: The policy repo rate has been increased by RBI by 50 basis points (bps) to 4.9%. RBI also raised the inflation forecast by 100 bps to 6.7% for this fiscal year. In all probability, RBI will not be able to meet its inflation target this year. This gives rise to expectations of further monetary tightening down the line. By doing so, RBI is likely to join the ranks of many global banks. In today’s age of uncertainty, macroeconomic adjustments have become the need of the hour, and not all of them are going to be benign to industry. The RBI Governor has wisely clarified that RBI is not bound down by any stereotype or convention in its handling of monetary policy. The evolving growth-inflation dynamics may necessitate more macroeconomic adjustments, and all stakeholders should rise to the occasion.
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