RBI has been pragmatic on growth; ring-fenced the liquidity issue

The Monetary Policy Committee (MPC) decision on rates was quite expected and hence the status quo was not a surprise for the market. The same holds for the accommodative stance, which means that growth will remain the main objective, as the MPC has stated that this stance will hold until growth prospects stabilise.

The focus was to be more on the language of the RBI on growth and inflation. Here, the RBI has been pragmatic on growth with a forecast of 10.5 per cent for fiscal 2021-22 (FY22), which is quite timely. The International Monetary Fund (IMF) had just spoken