RBI's multiple challenges

Attaining different objectives could become more difficult

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is meeting this week for the first time in 2021-22. The rate-setting committee is widely expected to leave the policy repo rate unchanged. The risk to economic recovery has increased significantly over the last few weeks with a sharp surge in Covid cases. Restrictions on movement in different parts of the country can affect supply chains. This would not only hurt economic recovery but also increase risks to inflation. The inflation rate remained outside the RBI’s tolerance band for several months in 2020, partly because of supply chain