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  • RBI Monetary Policy | NMIMS Deemed-to-be University’s Sarla Anil Modi School of Economics

    Published on June 4, 2021

    “RBI stands firm in its objective to accelerate growth while maintaining financial stability and the inflation target.

    RBI once again takes a finely balanced approach to ensure the revival of the economy in the most enduring way amidst mixed economic outlook and intensified fear of pandemic. Noticeable feature remains the extension of G-SAP operations in the form of GSAP 2.0 which will continue to generate multiple positive impacts by not only stabilizing the yield curve of G-sec bonds further but will also continue to guard the spread over short-tenure bonds. Proactive role of RBI in the FOREX market and deployment of additional market operations lends enough confidence in the bond and equity market alongside the equitable distribution of liquidity among all market stakeholders and stability of exchange rate.  On-tap liquidity window for severely hit contact intensive services and special liquidity and regulatory measures undertaken for stressed and ailing sectors makes policy inclusive. Such comprehensive decisions are likely to enhance credit flow and turn the employment and incomes of macro-economic households on a positive trajectory by the end of this financial year. However, in near future, RBI may have to approach towards neutral stance as the gap between WPI and CPI widens and corrective monetary policy decisions are taken globally especially in the US market. At this juncture, Policy decisions must be applauded for remaining accommodative and for providing consistent stimulus to the Indian economy as the downside risk widens.”

    -By Prof. Esha Khanna – Assistant Professor, NMIMS Sarla Anil Modi School of Economics – Mumbai