RBI hits pause button on monetary policy, applies balm on Covid-19 wounds

Decides to use future rate cuts "judiciously to maximise beneficial effects", gifts India Inc and individuals loan restructuring to ease pandemic-induced stress

The Reserve Bank of India (RBI) on Thursday exercised a pause in its monetary policy, deciding to use future rate cuts “judiciously to maximise the beneficial effects”, but gifted corporate India and individuals the respite of loan restructuring to ease the pandemic stress.

The six-member monetary policy committee (MPC) unanimously voted to keep the policy repo rate unchanged at 4 per cent and the reverse repo rate at 3.35 per cent, and kept the stance “accommodative”.

The central bank is expecting a contraction in economic growth this fiscal year, but said inflation should turn benign soon with bumper crops and