RBI likely to maintain status quo amid surge in COVID-19 cases

Amid the uncertainty created by spike in COVID-19 cases, RBI is likely to maintain status quo at its next monetary policy review and wait for some more time before taking any action to spur growth.

RBI is slated to announce its first bi-monthly monetary policy of the 2021-22 fiscal on April 7, 2021 after a three-day meeting of the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das.

According to the experts, RBI is likely to continue with the accommodative monetary policy stance and wait for an opportune time to announce monetary action with a view to ensure the best possible outcome in terms of pushing growth without sacrificing the main objective of containing inflation.

According to a recent report by Dun & Bradstreet, the recent spike in the COVID-19 cases and the restrictions imposed by several states will impose further uncertainty and hurdles to the pace of revival of industrial production.

“Despite the rising inflationary pressures, we expect the RBI to keep the policy repo rate unchanged in the forthcoming monetary policy review in view of the uncertainty posed by the sharp rise in COVID-19 cases,” Das said.

“India is witnessing a second wave with partial lockdowns being imposed across different states and cities. In such a scenario, it is only likely that the RBI will maintain status quo,” he added.