The RBI observed that the renewed jump in COVID-19 infections in several parts of the country and the associated localised and regional lockdowns, add uncertainty to the growth outlook.
The uncertainty generated by the surge in COVID-19 infections and localised lockdowns prompted RBI Governor Shaktikanta Das and other members of the rating setting panel MPC to unanimously vote for status quo in interest rates and an accommodative policy stance to support growth, as per minutes of the meeting released on Thursday.
"The need of the hour is to effectively secure the economic recovery underway so that it becomes broad-based and durable," the Governor said during the three-day meeting of the Monetary Policy Committee (MPC) which ended on April 7. The renewed jump in COVID-19 infections in several parts of the country and the associated localised and regional lockdowns add uncertainty to the growth outlook, he observed, as per the minutes of the meeting released by the central bank.
"In such an environment, monetary policy should remain accommodative to support, nurture and consolidate the recovery. We need to continue to sustain the impulses of growth in the new financial year 2021- 22," Das argued. The MPC, consisting of Das, Michael Debabrata Patra (RBI Deputy Governor), Mridul K Saggar (RBI Executive Director) and three external members namely Shashanka Bhide, Ashima Goyal and Jayanth R Varma, had voted in favour of retaining the repo rate unchanged at 4 percent.
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