The monetary policy committee of Reserve Bank of India (RBI) maintained status quo on interest rates for the sixth consecutive review meeting on Friday, indicating that reviving economic growth was top on its agenda as it decided to look through inflation pressure which are resurfacing in the economy due to a variety of factors including hardening of crude oil prices.
“The MPC also decided unanimously to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward,” said RBI governor Shaktikanta Das in Mumbai while announcing the policy review decision.
Policy measures on the liquidity front were broadly in line with expectation, with the central bank announcing the third tranche of bond buying worth Rs 40,000 crore under G-SAP 1.0. It also announced G-SAP 2.0, under which it will buy bonds worth Rs 1.2 trillion. The central bank will also buy bonds issued by state governments, unlike G-SAP 1.0 that was only for central government securities.