The newly constructed Monetary Policy Committee of the RBI will submit its policy report on Friday, which will be announced by its Governor Shaktikanta Das. The committee sat from October 7 to 9 to prepare the details. It was delayed by a week so that the government could appoint three external members to the panel.
The three outside members include – Ashima Goyal, Shashanka Bhide, and Jayanth Varma. The government-appointed these three individuals late on Monday. Ashima Goyal is part of the economic advisory council of Indian Prime Minister Narendra Modi, Shashanka Bhide is a Delhi-based think-tank and senior advisor at the National Council for Applied Economic Research, and Jayanth Varma is currently a finance and accounting professor at the Indian Institute of Management, Ahmedabad. The committee also comprises deputy governor Michael Patra and executive director Mridul Saggar and governor Shaktikanta Das apart from these three new members.
In these troubled times, the RBI policy is a much sought-after piece of information as all eyes are glued to it. COVID-19 situation has hijacked and usurped the economy of the entire country along with the world.
When the RBI announced the last monetary policy, it left the repo and reverse repo rate unchanged at 4 and 3.3 percent, respectively.
“The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target going forward,” said Shaktikanta Das.
“The MPC noted that the economy is experiencing unprecedented stress in an austere global environment. Extreme uncertainty characterizes the outlook, which is heavily contingent upon the intensity, spread, and duration of the pandemic – particularly the heightened risks associated with a second wave of infections – and the discovery of the vaccine,” the MPC said.
They maintained that supporting the recovery of the economy assumes primacy in the conduct of monetary policy during these troubled times. Hence, to keep up with this sole motive the stance of monetary policy remains accommodative as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy. “While space for further monetary policy action in support of this stance is available, it is important to use it judiciously and opportunistically to maximize the beneficial effects for underlying economic activity,” it said.