Nayar added that Overall, the tone of the Policy document appeared neutral, and the outlook for future Policy action is likely to be dependent on the incoming domestic inflation and growth data.

The MPC maintained its inflation projection for FY2023 at 6.7%, with risks evenly balanced, amidst a minor uptick in the estimate for Q3 FY2023.

As expected, the Monetary Policy Committee (MPC) delivered another ‘new normal’ repo rate hike of 50 bps in the September 2022 Policy review, albeit with a non-unanimous vote of 5:1, stated Aditi Nayar, Chief Economist, ICRA Limited.

The another rate hike in the Policy repo rate appears certain in the December 2022 MPC review, the quantum of which will be determined by how much the inflation print recedes in October 2022, as well as the strength of the GDP growth for Q2 FY2023, added Nayar.

Nayar added that Overall, the tone of the Policy document appeared neutral, and the outlook for future Policy action is likely to be dependent on the incoming domestic inflation and growth
data.

The MPC maintained its inflation projection for FY2023 at 6.7%, with risks evenly balanced, amidst a minor uptick in the estimate for Q3 FY2023.