Monetary policy review: RBI holds rates steady, ups inflation forecast

The RBI governor defended his protracted rate pause and lengthy accommodative stance as a compulsion brought by the pandemic

The Reserve Bank of India (RBI) on Friday kept its policy rates and stance unchanged and promised to remain accommodative as long as necessary, even as it raised its inflation projections.

The six-member Monetary Policy Committee (MPC) voted unanimously to keep the repo rate unchanged at 4 per cent. But external member Jayanth R Varma “expressed reservations” on the stance remaining accommodative for “as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward”.

In the past, Varma had