RBI Monetary Policy: MPC Sees Inflation At Elevated Levels

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Business

oi-Sunil Fernandes

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Published: Friday, December 4, 2020, 11:25 [IST]

The Monetary Policy Committee (MPC) is of the view that inflation is likely to remain elevated, barring transient relief in the winter months from prices of perishables.

“This constrains monetary policy at the current juncture from using the space available to act in support of growth. At the same time, the signs of recovery are far from being broadbased and are dependent on sustained policy support. A small window is available for proactive supply management strategies to break the inflation spiral being fuelled by supply chain disruptions, excessive margins and indirect taxes,” a release from the RBI post the MPC meet stated.

RBI Monetary Policy: MPC Sees Inflation At Elevated Levels

“Further efforts are necessary to mitigate supply-side driven inflation pressures. Monetary policy will monitor closely all threats to price stability to anchor broader macroeconomic and financial stability. Accordingly, the MPC in its meeting today decided to maintain status quo on the policy rate 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 release further stated.

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