Highlights of RBI’s Monetary Policy Committee off-cycle meeting

Below are the highlights of the decisions made in the off-cycle meeting of the RBI Monetary Policy Committee:

* Policy rate (repo) raised by 40 basis points to 4.4% with immediate effect

* First rate hike since August 2018 to raise borrowing costs for businesses and individuals

* Cash reserve ratio increased by 50 basis points to 4.5% effective 21 May

* MPC held an off-cycle meeting on May 2-4 to reassess the evolving inflation-growth dynamics

* The RBI also decides to remain accommodative while focusing on reversing the adjustment to ensure inflation stays within target going forward

* Dynamics in global commodity prices are driving the path of food inflation in India

* Inflation is expected to prevail at elevated levels, warranting firm and calibrated steps to anchor inflation expectations and contain second-round effects

* Renewed lockdowns and supply chain disruptions due to the resurgence of COVID-19 infections in major economies could result in higher logistic costs for longer

* The Indian economy seems poised to weather a deterioration in geopolitical conditions

* The increase in fertilizer prices and other input costs are directly affecting food prices in India

* Spillovers from global wheat shortages affecting domestic prices, although domestic supply remains comfortable

* The next meeting of the MPC is scheduled for June 6-8.

Image: YouTube/RBI

(Disclaimer: This story is auto-generated from a syndicated feed; only the image and caption may have been reworked from www.republicworld.com.)

(Disclaimer: This story is auto-generated from a syndicated feed; only the image and caption may have been reworked from www.republicworld.com.)

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