Kolkata, Jun 4 (UNI) "The status quo on key policy rates in June is on expected lines," said
Siddhartha Sanyal, Chief Economist and Head – Research, Bandhan Bank on today’s RBI
Monetary Policy.
The June MPC meeting took place against the backdrop of upside pressures for inflation
prints, despite renewed headwinds for growth recovery and markedly weak domestic
demand, Mr Sanyal said.
He said the MPC rightly hinted at their bias to look through the rising inflation prints in the
coming months to continue supporting growth, given the nascent and tentative nature of
recovery in economic activities.
The second wave of the pandemic, apart from immediate loss of economic activity, will likely
also result in medium-term headwinds in recovery in business and consumer confidence. While
the RBI has lowered their FY22 growth forecasts today by 1 percentage points, one feels further material downside to the same remains a possibility, Mr Sanyal said.
The RBI had been proactive in using both conventional and unconventional monetary policy
tools during the past about 15 months to buffer the economy from the effects of the pandemic.
In today’s policy, the RBI’s bias to continue extending the same was evident from the initiatives
such as liquidity support to contact-intensive sectors and MSMEs and small businesses, he said.
Further step up in G-SAP and inclusion of SDLs in the same are encouraging and should
continue to offer support for the broader spectrum of the yield curve, he added.
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