After delivering an ultra-dovish policy in the last meeting, the RBI started a course correction in the first meeting of FY23 as it embarked on a policy normalization path. While the MPC kept the policy rates and stance unchanged, it revised the forward guidance, focusing on withdrawal from ultra-accommodation and prioritizing inflation over economic growth. It introduced SDF (Standing Deposit Facility) as the floor of the LAF at 3.75% and restored the LAF corridor to the pre-COVID level of 50 bps. Further, the RBI revised the growth projections downward and the inflation forecast upward amidst geopolitical tensions and higher commodity prices. Given the revised forward guidance, we expect a change in the policy stance in the next meeting, followed by a repo rate hike in the August/September meeting.