Continued policy support crucial for sustained economic recovery: RBI Governor

After the Monetary Policy Committee meeting early this month, the RBI decided to keep its key lending rates steady at record low levels for the 10th straight time

Amid prolonged uncertainty, continued policy support will be crucial for sustained economic recovery from the coronavirus pandemic, Reserve Bank Governor Shaktikanta Das said at the recent meeting of the Monetary Policy Committee.

“In this period of prolonged uncertainty, it would be wise to remain agile and respond in a gradual, calibrated and well telegraphed manner to the emerging challenges,” opined Mr. Das, according to the minutes of the MPC meeting released by the Reserve Bank on Thursday.

Observing that economic recovery from the pandemic remains incomplete and uneven, he said, “continued support from various policies remains crucial for a sustained recovery.” The Governor said the renewed surge in international crude oil prices, however, requires close monitoring.

“We need to remain watchful of the risks to domestic inflation arising from rise in international commodity prices due to exogenous factors including geo-political developments. While core inflation remains elevated, demand-pull pressures are still muted, given the slack in the economy,” he said at the MPC meet.

After the three-day meeting of the Monetary Policy Committee (MPC) early this month, the RBI decided to keep its key lending rates steady at record low levels for the 10th straight time to support a durable recovery of the economy from the pandemic.

The six-member MPC, which has been on pause since August 2020, voted unanimously to maintain the status quo on the repo rate and by a majority of 5-1 decided to retain the accommodative policy stance as long as necessary.