*Highlights of RBI Governor Das' address post MPC meet*
*KEY TAKEAWAYS*
* Repo rate hiked by 50 bps
* MPC voted unanimously to hike repo rate by 50 bps
* SDF rate adjusts to 4.65%, MSF at 5.15%
* MPC unanimously decided to focus on withdrawal of accommodation
* Repo rate still remains at pre-pandemic level
* Necessary to be sensitive to new realities
* Our steps will be measured
* Will remain proactive in mitigating geopolitical risks
*OVERSEAS FACTORS*
* Facing new challenges due to war in Europe
* War has led to globalisation of inflation
* Europe war to keep commodity prices elevated
* Global stagflation concerns are growing
* Emerging markets seeing depreciation of their currencies
* Europe war dampening trade globally
*INFLATION*
* Latest survey shows significant fall in inflation expectations
* FY23 CPI inflation seen at 6.7%
* Upside risks to inflation persist
* Cut in VAT on petrol, diesel can lower inflation expectation
* 75% rise in inflation expectations can be attributed to food
* Apr-Jun CPI inflation seen at 7.5%
* Jan-Mar CPI inflation seen at 5.8%
* Jul-Sep CPI inflation seen at 7.4%
* New inflation projection assumes a normal monsoon
* Oct-Dec CPI inflation seen at 6.2%
* Inflation has increased steeply beyond tolerance levels
* Europe war causing food, fuel prices to stay elevated
* Will remain focussed on bringing inflation closer to target
* MPC noted inflation to remain above 6% till Oct-Dec
* Upside risks to inflation in May materialised earlier
* Fuel excise cut, other steps by government to help ease inflation
* Further monetary policy measures needed to anchor inflation
* Inflationary pressure remains broad-based led by supply shocks
* MPC felt higher inflation could trigger inflation expectations
* Inflationary pressures driven by supply shocks
*ECONOMY*
* Indian economy has remained resilient
* Recovery gained momentum despite war, pandemic
* Domestic activity picking up despite inflation pressure
* Recovery in domestic economic activity remains firm
* Available information shows domestic economic recovery firm
* PMI for May points towards economic recovery
* Urban demand recovering, rural demand gradually improving
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