A no-action policy with focus on growth

'Unwinding' is unlikely to happen before the third quarter of this year even if we don't mess up in tackling a possible third wave of Covid; rate hike may have to wait for next year

Indian central bank’s rate-setting body, the Monetary Policy Committee (MPC), will hold its second meeting of the current fiscal year this week. At its first meeting in April, the six-member MPC unanimously kept the policy rates unchanged — at its historic low. It also continued with its accommodative stance with a subtle change.

Till the last MPC meeting of fiscal year 2021, held in February, the Reserve Bank of India (RBI) had been giving a long forward guidance — to continue with its accommodative stance as long as necessary. In April, it moved away from time-based guidance to data-based one —