Persistence of inflation at elevated levels constrains monetary policy at the current juncture, RBI Governor Shaktikanta Das has said.
“At the same time, though recovery is underway, there is still continuous need to nurture and support growth to make it broad based and durable.
A premature roll back of the monetary and liquidity policies of RBI would be detrimental to the nascent recovery and growth. The overall situation needs to be monitored carefully, both in the sides of growth and inflation. On balance, therefore, I vote to keep the policy rate unchanged and continue with the accommodative stance as long as necessary – at least during the current financial year and into the next financial year – to revive growth on a durable basis and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward,” the RBI Governor has said, in the MPC Minutes released by the RBI.
“We need to monitor closely all threats to price stability and possible spill overs to broader macroeconomic and financial stability. The Reserve Bank will continue to respond to global spill overs to secure domestic stability with our liquidity management operations. The various instruments at our command will be used at the appropriate time, calibrating them to ensure that ample liquidity is available in the system,” he further added.
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