The Reserve Bank of India (RBI) maintained its repo rate at 4.00% and reverse repo rate at 3.35% in February 2022, reflecting an accommodative stance despite rising inflation, with CPI reaching 5.6% in December. GDP growth is projected at 7.8% for FY23, amidst challenges from the Omicron variant affecting global economic activity, while RBI emphasizes the need for continued policy support for domestic recovery. The analysis suggests a focus on liquidity normalization and warns of potential adjustments in future policies stemming from growth-inflation dynamics.

1. IMPACT ANALYSIS
Monetary Policy Statement,
2021-22
RBI’s
Inflation
Target
2.5
3.5
4.5
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
RBI Policy Rates Trend- Last 1 year
Repo Rate CRR Reverse Repo
0
2
4
6
8
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
CPI Inflation (Month-on-Month %)
ACCOMMODATIVE
WHAT IS RBI’S STANCE?
INFLATION HIGHLIGHTS
RBI POLICY HIGHLIGHTS
• RBI kept the Repo rate unchanged at 4.00%
• Reverse Repo rate remains unchanged at 3.35%
• Marginal Standing Facility (MSF) rate and the Bank
rate accordingly remains unchanged at 4.25%
• Cash Reserve Ratio (CRR) isat 4%
• Statutory Liquidity Ratio (SLR) at18.00%
• CPI (Consumer Price Index) inflation, for the month of
Dec increased to 5.6% from 4.9% inNov
• Food inflation increased to 4.5% in Dec from 2.7% in
Nov
• Housing inflation, which primarily includes rental
charges came in at 3.6% for the month of Dec
• On Jan 7, National Statistical Office (NSO) placed India’s real gross domestic product (GDP) growth at 9.2%
for 2021-22, surpassing its pre-pandemic (2019-20) level.
• The manufacturing and services PMI stayed in expansion zone in Jan at 54.0 and 51.5 respectively
• Overall system liquidity continued to be in large surplus
• Money supply (M3) and bank credit by commercial banks rose by 8.4% and 8.2% (y-o-y)
• Up to Feb 4, India’s foreign exchange reserves increased by US$ 55 billion in 2021-22 to US$ 632 billion
DOMESTIC ECONOMY
Data Source: RBI Monetary Policy Statement 2021-22 dated February 10, 2022, Data Source for CRR & SLR: RBI

2. IMPACT ANALYSIS
Monetary Policy Statement,
2021-22
OUR ANALYSIS & OUTLOOK
GLOBAL ECONOMY
The Reserve Bank of India (RBI) kept its policy rates, stance and liquidity management decisions unchanged in
February -2022 and following were the key pointers pertaining to the policy:
• All six members voted for keeping policy rates unchanged and five members voted for keeping the stance
accommodative with one-member voting against it.
• RBI estimates: GDP growth to be at 7.8% and CPI Inflation at 4.5% for FY’23
• Restoration of normal liquidity management framework
1. Variable rate repo operations of varying tenors can henceforth be conducted as and when warranted by
the evolving liquidity and financial conditions
2. Variable rate repos (VRRs) and variable rate reverse repos (VRRRs) of 14-day tenor can operate as the
main liquidity management tool
3. Afore-mentioned main operations can be supported by fine-tuning operations to tide over any
unanticipated liquidity changes
• Increase the investment limit under Voluntary Retention Route (VRR) by Rs 1 Lakh Crore to Rs 2.5 Lakh Crore
with effect from April 1, 2022. The VRR is available to FPIs for investment in GSec and corporate bonds since
March 1, 2019.
• Since the MPC’s (Monetary Policy Committee) meeting in Dec, the global economic activity has been dampened
mainly due to Omicron variant and the associated restrictions.
• In Jan 2022, the global composite purchasing managers’ index (PMI) slipped to an 18 month low of 51.4.
• The International Monetary Fund (IMF) revised global output and trade growth projections for 2022 downward to
4.4% and 6.0% from its earlier forecasts of 4.9% and 6.7%, respectively.
• Central banks globally focused on policy normalization, including ending asset purchases and earlier than
expected hikes in policy rates leading to volatility in equity markets and rise in sovereign bond yields across
maturities
Data Source: RBI Monetary Policy Statement 2021-22 dated February 10, 2022, Data Source for CRR & SLR: RBI

3. IMPACT ANALYSIS
Monetary Policy Statement,
2021-22
OUR VIEW
The policy decisions are in line with our expectation on repo rate and stance. However, we were
expecting a hike in reverse repo rate.
The policy continues to remain dovish and may increase the risks of sharp adjustments in the future
policies.
On the liquidity side, RBI resuming variable reverse repo rate (VRRR) auction to manage transient
liquidity requirements points towards continued focus on normalization of monetary stimulus.
The disconnect arises mainly from the non-action on the reverse-repo side, which may-be due to
the divergence in market and RBI expectations on growth-inflation dynamics.
MPC’s statement highlighted “the MPC judges that the ongoing domestic recovery is still incomplete
and needs continued policy support”, this may also be a reason for RBI’s benign expectation of CPI.
RBI’s priority remains towards Growth and Yield curve management and it appears Inflation battle is
for another day. This may give rise to longer and volatile cycle.
Clearly, this year normalization process would depend on various factors: RBI’s take on Growth-
inflation dynamics, inflation path on the back of elevated energy prices and input costs, a recovering
economy and global central banks glide-path towards policy normalization.
We continue our stance of RBI narrowing the Liquidity Adjustment Facility (LAF) corridor as the next
step of withdrawing stimulus.
We are in an interest-rate rise cycle and hence recommend exposure towards floating rate
instruments.
The longer end carry appears reasonable with risk adequately priced-in. Hence, more nimble and
active duration management approach is recommended. We recommend investing in spread assets
with an aim to benefit from higher carry.
Data Source: RBI Monetary Policy Statement 2021-22 dated February 10, 2022, Data Source for CRR & SLR: RBI

4. IMPACT ANALYSIS
Monetary Policy Statement,
2021-22
Approach Scheme Name Call to Action Rationale
Short
Duration
Schemes
Invest for parking
surplus funds
Accrual + Moderate
Volatility
Accrual
Schemes
ICICI Prudential Medium Term Bond Fund
ICICI Prudential Credit Risk Fund
Core Portfolio with >1 Yr
investment horizon Better Accrual
Dynamic
Duration
Scheme
ICICI Prudential All Seasons Bond Fund
Long Term Approach
with >3 Yrs investment
horizon
Active Duration and
Better Accrual
SCHEME RECOMMENDATIONS
ICICI Prudential Savings Fund
ICICI Prudential Floating Interest Fund
ICICI Prudential Ultra Short Term Fund

5. IMPACT ANALYSIS
Monetary Policy Statement,
2021-22
DISCLAIMER
RISKOMETERS
None of the aforesaid recommendations are based on any assumptions. These are purely for reference and the investors are requested
to consult their financial advisors before investing. All data/information used in the preparation of this material is specific to a time and
may or may not be relevant in future post issuance of this material. ICICI Prudential Asset Management Company Limited (the AMC) takes
no responsibility of updating any data/information in this material from time to time. The AMC (includ- ing its affiliates), ICICI Prudential
Mutual Fund (the Fund), ICICI Prudential Trust Limited (the Trust) and any of its officers, directors, personnel and employees, shall not
liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also
any loss of profit in any way arising from the use of this material in any manner. Nothing contained in this document shall be construed to
be an investment advice or an assurance of the benefits of investing in the any of the Schemes of the Fund. Sectors/stocks mentioned in
the article do not constitute any recommendation and the Fund through its schemes may or may not have any future position in these
sectors/stocks. Recipient alone shall be fully responsible for any decision taken on the basis of this document. The information contained
herein is only for the purpose of information and not for distribution and do not constitute an offer to buy or sell or solicitation of any offer
to buy or sell any securities or financial instruments in the United States of America ("US") and/or Canada or for the benefit of US persons
(being persons falling within the definition of the term "US Person" under the US Securities Act, 1933, as amended) or persons residing in
Canada.
ICICI Prudential Credit Risk Fund (An open ended debt scheme predominantly investing in AA and
below rated corporate bonds. A relatively high interest rate risk and relatively high credit risk.) is
suitable for investors who are seeking*:
• Medium term savings
• A debt scheme that aims to generate income through investing predominantly in AA and below
rated corporate bonds while maintaining the optimum balance of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Savings Fund (An open ended low duration debt scheme investing in instruments
such that the Macaulay duration of the portfolio is between 6 months and 12 months. A relatively
high interest rate risk and moderate credit risk. ) is suitable for investors who are seeking*:
•Short term savings
•An open ended low duration debt scheme that aims to maximize income by investing in debt
and money market instruments while maintaining optimum balance of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
Low
Low to
Moderate
ModerateModerately
H igh
Very
H igh
H igh
Investors understand that their principal
will be at High risk
Low
Low to
Mo derate
ModerateModerately
H igh
Very
H igh
H igh
Investors understand that their principal
will be at Low to Moderate risk
Note: The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by
dividing the present value of the cash flow by the price. Please note that the Risk-o-meter(s) specified above will be evaluated and updated on a monthly
basis. The above Risk-o-meter(s) are as on January 31, 2022.

6. IMPACT ANALYSIS
Monetary Policy Statement,
2021-22
RISKOMETERS
ICICI Prudential Medium Term Bond Fund (An open ended me dium term debt scheme investing in
instruments such that the Macaulay duration of the portfolio is between 3 Years and 4 Years. The
Macaulay duration of the portfolio is 1 Year to 4 years under anticipated adverse situation. A
relatively high interest rate risk and moderate credit risk.) is suitable for investors who are seeking*
• Medium term savings
• A debt scheme that invests in debt and money market instruments with a view to maximize
income while maintaining optimum balance of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential All Seasons Bond Fund (An open ended dynamic debt scheme investing across
duration. A relatively high interest rate risk and moderate credit risk.) is suitable for investors who
are seeking*:
•All duration savings
• A debt scheme that invests in debt and money market instruments with a view to maximise
income while maintaining optimum balance of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Ultra Short Term Fund(An open ended ultra-short term debt scheme investing in
instruments such that the Macaulay duration of the portfolio is between 3 months and 6 months.
A moderate interest rate risk and moderate credit risk.) is suitable for investors who are seeking*:
•Short term regular income
•An open ended ultra-short term debt scheme investing in a range of debt and money market
instruments
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
ICICI Prudential Floating Interest Fund (An open ended debt scheme predominantly investing in
floating rate instruments (including fi xed rate instruments converted to floating rate exposures using
swaps/derivatives. A relatively high interest rate risk and moderate credit risk.) is suitable for investors
who are seeking*:
•Short term savings
•An open ended debt scheme predominantly investing in floating rate instruments
*Investors should consult their financial advisers if in doubt about whether the product is suitable for
them.
Low
Low to
Moderate
ModerateModerately
H igh
Very
H igh
H igh
Investors understand that their principal
will be at Moderately High risk
Low
Low to
Moderate
Moderate
Moderately
H igh
Very
H igh
H igh
Investors understand that their principal
will be at Moderately High risk
Low
Low to
Moderate
ModerateModerately
H igh
Very
H igh
H igh
Investors understand that their principal
will be at Moderate risk
Low
Low to
Moderate
ModerateModerately
H igh
Very
H igh
H igh
Investors understand that their principal
will be at Moderately High risk
Note: The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by
dividing the present value of the cash flow by the price. Please note that the Risk-o-meter(s) specified above will be evaluated and updated on a monthly
basis. The above Risk-o-meter(s) are as on January 31, 2022.

7. Sr No Scheme Name Position in the Matrix
1
ICICI Prudential Medium Term Bond
Fund
2 ICICI Prudential All Seasons Bond Fund
3 ICICI Prudential Savings Fund
4 ICICI Prudential Floating Interest Fund
5 ICICI Prudential Ultra Short Term Fund
6 ICICI Prudential Credit Risk Fund
IMPACT ANALYSIS
Monetary Policy Statement,
2021-22
POTENTIAL RISK MATRIX
As per SEBI Circular dated , June 07, 2021; thepotential risk class (PRC) matrix based on interest rate risk and credit
risk, is as below:
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.