“Coupled with other liquidity measures, it facilitated congenial and orderly financing conditions and a conducive environment for the recovery,” Mr. Das said after announcing the Monetary Policy Committee’s decision to keep interest rates unchanged and retain an ‘accommodative’ policy stance. The RBI, however, remained ready to undertake G-SAP as and when warranted by liquidity conditions, and would also continue to flexibly conduct other liquidity management operations including Operation Twist (OT) and regular open market operations (OMOs). Lowers inflation outlookThe RBI retained its growth forecast for this fiscal at 9.5% and cut its projection for average inflation for the full year to 5.3%, from 5.7% earlier, even as it flagged core inflation that ‘remains sticky’. “Headline inflation continues to be significantly influenced by very high inflation in select items such as edible oils, petrol and diesel, LPG and medicines,” the RBI Governor said. ‘Rate hike by FY22-end’“Like many other central banks, the RBI is signalling a gradual move towards ‘normalising’ its monetary policy as the economy emerges from the shadow of the second wave,” Crisil Research said in a report.

Source: The Hindu October 08, 2021 17:03 UTC