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Continued policy support crucial for sustained economic recovery: RBI Governor | Economy News

NEW DELHI: Amid long-term uncertainty, continued policy support will be crucial for a stable economic recovery from the coronavirus pandemic, Reserve Bank Governor Shaktikanta Das said at a recent meeting of the Monetary Policy Committee.

“In this age of long uncertainty, it would be wise to be agile and responsive in handling, balancing and phoning effectively to emerging challenges,” according to minutes of the MPC meeting released by the Reserve Bank in Thursday. .

Noting that the economic recovery from the pandemic is incomplete and inequitable, he said, “continued support from a wide range of policies is essential for a sustained recovery.”

The governor said renewable energy in international crude oil prices, however, needed close attention.

“We need to be aware of the risks to housing inflation that are rising in global market prices due to exogenous factors including political developments,” he said at the MPC meeting.

After a three-day meeting of the Monetary Policy Committee (MPC) earlier this month, the RBI decided to keep its key loan rates steady at low interest rates for the 10th straight period to support the proper recovery of the economy from the pandemic- the disease.

The six-member MPC, which has been on hold since August 2020, voted unanimously to maintain its position on the repo rate and by a landslide of 5-1 decided to suspend the housing policy as long as necessary.

MPC member and RBI Deputy Governor Michael Debabrata Patra said the Indian economy is meeting headlines as well as cross currents.

Referring to air pollution, he said more than a billion vaccines have been successful but only 56 percent of the total population has been fully vaccinated. The next billion “will come back to haunt you,” he said.

He said the program work in India seems to have endured a third wave, but messages from incoming high frequency signals are mixed.

“It is wise to assume that the recovery may have lost some momentum during Q4: 2021-22 and Q1: 2022-23. “Patra said while voting for maintaining the policy rate and maintaining a stable housing policy has not changed.

RBI Executive Director and MPC member Mridul K Saggar said the Omicron gap with ongoing port pollution and supply shortages is starting to cause global growth.

This, in turn, could be done in line with Bernoulli’s policy on water pressure, which allows the growth pipe to shrink with the external demand of the fall working to curb the rated pressure pressures from the supply side, he said.

On the plus side, Saggar said the additional headline is projected to ease into the area of ​​the 5 per cent mark in the first half of 2022-23 and then return to a 4 per cent target by the third quarter of the next budget.

Otherwise, the lunar eclipse and oil prices will need to be looked at more closely, he added.

MPC member Jayanth R Varma voted in favor of keeping the policy rate at 4 per cent but voted against the policy stance on two counts.

“First of all, the transition to neutrality has been long overdue. Second, the continued harping on combating the pathogenic effects of the pandemic has become a metaphorical opposition and prevented the MPC from focusing on the fundamental issue of reversing recession patterns. at least until 2019, ”Varma said.

MPC member Ashima Goyal is of the view that the current account deficit is in control and the general balance of payments is declining with an increased share of foreign direct investment.

At this time there is room to adapt the policy to the needs of the domestic child, Goyal said.

“In view of the expected trends in inflation and growth and in order to balance the market on recession, I voted to continue with the current stability and repo rate,” Goyal added.
MPC member Shashanka Bhide said that to strengthen positive growth trends in the economy, the need for a favorable economy and financial conditions have become important factors. Transferring energy and investment costs will require access to financial resources to both customers and companies. Also Read: Meet Susanne Pulverer, IKEA Indian First Lady

He also voted in favor of continuing with the housing crisis as long as it is important to revitalize and sustain growth on the right basis and continue to reduce the impact of the pandemic on the economy, while ensuring that inflation is within mass going forward. Also Read: Tax Retro Case: India pays Cairn Rs 7,900 crore to resolve dispute

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