Time to reassess monetary policy positions

Although the pandemic is unlikely to end immediately, its impact on economic activity would slowly wane

Economic activity has recovered swiftly with the decline in Covid-19 cases. Activity tracked by the Nomura India Business Resumption Index, for instance, recently crossed the pre-pandemic level for the first time. Although the pandemic risk has not completely abated, particularly given the level of vaccination, it is perhaps time to start rolling back the emergency response to the crisis. In its latest review, the Monetary Policy Committee (MPC) left the policy rate unchanged with the assurance to keep the stance accommodative as long as necessary.

Some difference of opinion, however, is beginning to emerge in the rate-setting committee. External member Jayanth