MPC chose loose policy to nurse growth, felt inflation wasn't demand-driven

Loss in momentum of activity could be temporary and restricted to the first quarter of FY22, RBI governor Shaktikanta Das is quoted to have said in minutes of MPC meetings

The six-member monetary policy committee (MPC) felt it was imperative to continue with a loose monetary policy to support growth, as the second wave of the pandemic turned out to be more severe than expected.

The wave, however, largely impacted the consumer demand sentiment, while economic activities continued due to better containment efforts, and supply chains adjusting well to constraints.

“Overall, it is expected that the loss in momentum of activity could be temporary and restricted to the first quarter of 2021-22,” said Reserve Bank of India (RBI) governor Shaktikanta Das, edited minutes of the MPC meetings showed.  

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