Economics
Omicron Risks Force India to Hold Rates, Soak Up Liquidity
- RBI vows to keep stance accommodative for as long as needed
- Leaves benchmark interest rate unchanged at record low
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India’s central bank kept borrowing costs at a record-low to ward off risks to economic recovery from the omicron variant, while sponging away excess liquidity to keep inflationary pressures at bay.
The Monetary Policy Committee voted to keep the benchmark repurchase rate at 4%, as predicted by all 35 economists surveyed by Bloomberg. The six-member panel, which has been on pause since August 2020, voted 5-1 to retain its accommodative policy stance for as long as is necessary, reflecting its bias to support economic growth given inflation is within target.