key takeaways from the RBI policy meet

key takeaways from the RBI policy meet 

1) The RBI took a smaller rate hike (0.35%) amid moderating inflation rate. In total, it has raised the key rate by 225 basis points (2.25%) in 2022. 

2) However, the RBI warned that inflation remains high and broad-based. 

3) It expects inflation to be at 6.7% in FY23 – above its target of 6%. This estimate assumes that the average crude oil price would be USD 100 per barrel.

4) Interestingly, the central bank expects inflation to cool off sharply to 5% in Q1FY24 and 5.4% in Q2FY24 on the assumption of a normal monsoon.

5) Meanwhile, it has cut India's GDP forecast to 6.8% from 7.0% for FY23. Despite this, India will still be one of the fastest-growing economies in the world.  

6) The RBI said that investment activity will get support from government capex going ahead.

7) The RBI observed that rural demand is recovering as reflected in the pace of tractor and retail two-wheeler sales, with rising farm activity.
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