RBI's monetary policy to focus on macroeconomic stability

Since the last policy announcement, inflationary risks have increased significantly

The Reserve Bank of India’s (RBI’s) monetary policy actions during April-May 2022 were swift and aggressive not just to control the surging inflation but also to safeguard the value of India’s domestic currency and to protect macroeconomic stability. In May, the US Federal Reserve had implemented its largest interest rate increase in two decades and like many other central banks. The RBI, too, had anticipated the Fed’s move and implemented its own monetary policy actions in an off-policy cycle meeting.

Reasons were obvious. While the economic recovery was too slow and uneven, India’s retail (CPI) inflation had stayed above the RBI’s