The Reserve Bank of India on Friday lowered the country’s Gross Domestic Product growth rate to 7.2% for the financial year 2022-’23, The Indian Express reported. Earlier, the bank had projected the growth rate to be 7.8%.

For the first quarter (April-June) of the financial year, the growth rate is expected to grow at 16.2%, followed by 6.2% in the second quarter, 4.1% in the third quarter and 4% in the final quarter of January to March, the RBI said after its three-day Monetary Policy Committee meeting, according to Business Standard.

The central bank also kept the repo rate unchanged at 4% for the eleventh consecutive time. However, it increased the reverse repo rate by 40 basis points to 3.75% from previous years’ 3.35%.

Repo rate is the interest rate at which the central bank lends to commercial banks. The reverse repo rate, on the other hand, allows banks to deposit funds with the central bank and earn interest on them.

Reserve Bank of India Governor Shaktikanta Das said that the hike in reverse repo rate was to ensure liquidity, according to The Indian Express.

“With the commencement of the war in Europe, we are confronted with new and humongous challenges,” Das said during a media briefing. “Conflict in Europe has the potential to derail the global economy.”

Further citing the rise in global crude oil price, Das said that the average consumer price index was projected at 5.7% for the 2022-’23 financial year. It was earlier expected to grow at 4.5%. The consumer price index is an indicator of rise in prices.

The RBI governor announced that the committee voted in favour of continuing with its “accommodative” stance on economic policy.

An accommodative monetary policy is when central banks expand the supply of money in the markets to boost economic growth.

Das, however, noted that the time has come for the central bank to put its priorities on inflation management over growth, according to PTI.

Das also announced cardless cash withdrawals will be made available at every bank and ATMs, Moneycontrol reported. The withdrawal will be done through the system of Unified Payments Interface to prevent fraud.