RBI Governor Shaktikanta Das has batted for continued policy support despite rising pandemic risks
Mumbai:
Reserve Bank of India (RBI) Governor Shaktikanta Das stressed on continued policy support despite growing concerns over the Omicron version of the coronavirus pandemic during his meeting earlier this month, which was held by members of the bank’s Monetary Policy Committee (MPC). was echoed. Decide on prime lending rates.
As per the minutes of the MPC meeting held between 6-8 December, 2021, Mr Das said that uncertainty is emerging as certainty amidst rising Omicron type of cases in the country and its possible impact on the economy.
All MPC members had unanimously decided to keep the repo and reverse repo rates unchanged after a three-day deliberation held at the RBI office in Mumbai.
During the meeting, the RBI governor said the risk on the global economy has increased with the rapid spread of virus mutations, including the Omicron variant, making countries scrambling for restrictions.
These developments are certainly two major avenues for central bankers, he said.
“First, uncertainty is emerging as the only certainty that central bankers will have to deal with in the period ahead. Second, as monetary policy is at a juncture, the monetary policy journey which is hardly smooth at the best of times, is going to be more challenging,” he noted by the minutes.
He said the Indian economy is facing several constraints arising out of global factors – some lasting longer than the old initial assessment, as well as new ones.
He further said that there is increasing uncertainty about the evolving global macroeconomic outlook. On the domestic front, even though the prospects for economic activity are improving, the slowdown remains with key drivers such as private consumption remaining well below their pre-pandemic levels, Mr Das said.
“Given these uncertainties, a sustainable, broad-based and self-sustaining rebound requires continued policy support, particularly to nurture revival in areas that are lagging behind and to protect those that are underdeveloped. We are exposed to headwinds,” the governor said.
All members of the MPC – Shashank Bhide, Ashima Goyal, Jayant R Verma, Mridul K Sagar, Michael Debabrata Patra and Shaktikanta Das – had unanimously voted to keep the policy repo rate unchanged at 4 per cent.
Barring Mr. Verma, all members also voted to continue the accommodative stance as long as necessary to revive and sustain growth on a sustainable basis and mitigate the impact of the coronavirus pandemic on the economy, while ensuring ensure that inflation remains within the target. going forward.
Mr. Verma had objected to this part of the motion.
,