December 9, 2021 4:14:18 am
Reserve Bank Governor Shaktikanta Das on Wednesday said “managing a durable, strong and inclusive recovery is our mission” as the economic recovery is “not yet strong enough to be self-sustaining and durable”.
“Our motto is to ensure a soft landing that is well timed,” Das said after unveiling the bimonthly monetary policy.
While the central bank on Wednesday kept the Repo rates unchanged, the anticipated hike in Reverse repo rate didn’t happen, indicating that it’s not yet ready to tighten the liquidity and unwind the accommodative policy in the wake of the threat being posed by Covid variants.
A hike in the reverse repo rate would have brought down the money supply in the financial system and more incentives for commercial banks to park their funds with the central bank. Bankers expect the RBI to hike the reverse repo rate in the next quarter.
“Price stability remains the cardinal principle for monetary policy as it fosters growth and stability,” he said. The Indian economy is relatively well-positioned on the path of recovery, but it cannot be immune to global spill overs or to possible surges of infections from new mutations including the Omicron variant, Das said. “Hence, fortifying our macroeconomic fundamentals, making our financial markets and institutions resilient and sound, and putting in place credible and consistent policies will assume the highest priority in these uncertain times,” Das said.
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