RBI's focus shifts to inflation from economic growth amid geopolitical crisis
Mumbai: Taking note of the risks due to rising inflation amid global geopolitical incidents, after a period of two years, the RBI is prioritizing inflation over economic growth.
In terms of sequence of priorities, the RBI has now kept inflation ahead of economic growth, RBI Governor Shaktikanta Das said in the post-policy press conference.
The RBI has its inflation projection upwards for FY 2022-23 and also reduced the growth projection from 7.8 percent to 7.2 percent.
The RBI had projected the inflation at 4.5 percent in its last policy review.
"The broad-based jump in global commodity prices has exacerbated inflationary pressures across advanced economies (AEs) and emerging market economies (EMEs) alike causing a sharp revision in their inflation projections," the RBI said.
For the months of January and February, inflation has been at over 6 percent, surpassing the upper end of RBI's tolerance band.
The RBI has kept the key policy repo rate at 4 percent and introduced the Standing Deposit Facility (SDF) at 3.75 percent and MSF at 4.25 percent.
"Looking ahead, the inflation trajectory will depend critically upon the evolving geopolitical situation and its impact on global commodity prices and logistics.," the RBI said.