The six-member Monetary Policy Committee headed by Reserve Bank of India Governor Shaktikanta Das started deliberations on the bi-monthly policy review on Tuesday and made the announcements on Thursday.

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The key highlights of the policy are:

1. RBI keeps the benchmark repo rate unchanged at 4%. 

2. The reverse repo rate remains at 3.35%

3. Real GDP growth is projected at 7.8% for FY23. 

4. Inflation to peak in Q4FY22, moderate in H2FY23.

5. CPI inflation moved in close alignment with projections. CPI inflation is projected at 4.5 per cent for 2022-23.

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6. RBI Governor said that real GDP growth of 9.2 per cent in FY22 will take the economy above the pre-pandemic level.

7. VRRR of varying tenors will be conducted whenever warranted and it has become the main option for managing liquidity.

8. E-rupee prepaid voucher – cap increased to Rs 1 lakh from Rs 10,000.

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9. Food inflation remains elevated. System liquidity remains in large surplus.

10. Our monetary policy will continue to be guided by inflation while ensuring growth. There could be some softening of core inflation, said RBI Governor Shaktikanta.

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11. MPC of view that continued policy support warranted for durable recovery; need to be vigilant about elevated crude oil prices. Governor Shaktikanta said the MPC decided to hold a key policy repo rate at 4%. MPC voted 5-1 to continue with the accommodative stance.

12. Output barely above pre-pandemic level and India to grow at the fastest pace in the world. Inflation is at a multi-decadal high in several countries.

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The Indian indexes got off to a good start on Thursday. At the outset, the Sensex had risen more than 300 points, while the Nifty had gained over 100 points. Investors responded favourably to the Reserve Bank of India’s decision to leave key interest rates unchanged on Thursday.