What are the key things that the RBI said in the monetary policy announcement on 08 December?

The RBI monetary policy on 08-December essentially maintained status quo on its announcements and on its macro estimates. Let me first focus on policy announcements. The RBI maintained the repo rates at 4% and surprisingly even the reverse rates at 3.35%. In addition, 5 out of the 6 members of the MPC voted to hold the accommodative stance of the monetary policy as long as required.

In terms of the GDP growth forecasts, RBI has held on to its real GDP growth forecast at 9.5% for FY22. This is despite the actual Q2 GDP growth being 50 bps above the RBI estimate. What the RBI has done is it has lowered the growth estimates for Q3 and Q4 to factor in Omicron risk. The headline inflation estimate for FY22 was kept static at 5.3% for FY22 and RBI has expressed confidence that Rabi influx would contain food inflation.