RBI increases Inflation Target to 5.7% for FY23

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RBI increases Inflation Target to 5.7% for FY23
08 Apr 2022
6 min read

News Synopsis

On Friday, the Reserve Bank of India increased the retail inflation target to 5.7 percent for the current financial year. RBI stated that the rising global prices amidst the ongoing geopolitical tensions are the main reason behind this. While launching the  first  monetary policy review for the current fiscal year, the Governor of the Reserve Bank of India, Shaktikanta Das said: "Global food prices along with metal prices have hardened significantly. EconomyThe economy is grappling with a sharp rise in inflation. Inflation is now projected at 5.7 percent in 2022-23 with Q1 at 6.3 percent; Q2 at 5 percent; Q3 at 5.4 per centpercent and Q4 at 5.1 percent."

In its review in February, projected retail inflation rate was at 4.5 percent in 2022-23 by the RBI. The repo rate remained constant at 4% by RBI. This is the 11th time in a row that the Monetary Policy Committee (MPC) headed by Das has maintained the status quo. Mr. Das further stated: "It may, however, be noted that given the economic volatility on global crude oil prices... the evolving geopolitical tensions, any projection of growth and inflation is fraught with risk.”

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