Response to RBI’s monetary policy announcement from Dr. M Sharma, Chief Economist, Infomerics

Dr. M Sharma, Chief Economist, Infomerics – “In view of the evolving growth-inflation dynamics, the MPC took the right call of hiking the Policy rate by a hefty 50 bps on top of the unscheduled off-policy cycle hike effected in May 2022. This strong measure will certainly help to control persistent inflation to some extent, but it may hurt fragile growth impulses. The move to expand the lending scope of cooperative banks, which have a legacy and nationwide presence, is highly welcomed. This will not only help state and rural banks in boosting their loan book / enhance their working, but also give a thrust to affordable housing for all, as outlined by Hon’ble PM time and again. Contextually significant.”