News

MPC Minutes: MPC Sees ‘Avant Garde’ Role For Monetary Policy Amid Covid-19 Risks

MPC Minutes: MPC Sees ‘Avant Garde’ Role For Monetary Policy Amid Covid-19 Risks

 

Faced with an abrupt change in the macroeconomic scenario due to the local spread of Covid-19, India’s Monetary Policy Committee called for coordinated interest rate cuts and liquidity infusion to counter emerging growth risks and ensure financial stability. The committee, which held an emergency meet from March 24-27, decided to cut the policy repo rate to 4.4 percent. Alongside, the Reserve Bank of India announced measures to infuse Rs 3.75 lakh crore in liquidity, include a 100-basis-point cut in the cash reserve ratio. 

The minutes of the meeting released on Monday showed that most committee members felt that these measures were essential to maintain financial stability and impact some support to growth. Shaktikanta Das, RBI Governor The RBI governor said arresting risks to the growth outlook and preserving financial stability should receive the highest priority at this stage.

Top