India’s central bank is deeply aware of its limitations in fighting covid-19, yet it is willing to go far into uncharted territory to preserve growth and financial stability.
That inflation would most likely allow it to do so is a small blessing in the case of the Reserve Bank of India (RBI). The minutes of the monetary policy committee meeting held last month, ahead of its schedule, shows that all six members voted for a deep rate cut and going “avante garde" to minimise the impact of covid-19 on the economy.
Perhaps Governor Shaktikanta Das’ comment summarised the intent of the RBI. “We are living through an extraordinary time and the situation currently facing the country is unprecedented.