RBI's wise move

06 JUN,2021 | MEDC


 

RBI has acted wisely by keeping key policy rates unchanged in its bi-monthly Monetary Policy Review presented this week. According to the Monetary Policy Committee (MPC), the stance remains accommodative for as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of Covid on the economy, while ensuring that inflation remains within the target going forward. Risks to inflation are evenly balanced – while rising crude prices could raise it, the lack of domestic demand will lower it. In this uncertain environment, tinkering with interest rates is not advisable. The second wave of Covid has hit the economy hard, and so the MPC is focusing on not just sustaining growth, but also reviving it. RBI’s concern over trading in cryptocurrencies is also welcome. It bodes well for financial stability.

*Photo Credit: Google

 

 

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