Rapidly rising cases of COVID-19 is the single biggest challenge to ongoing economic recovery in India, said Reserve Bank of India (RBI) governor Shaktikanta Das during the monetary policy committee meeting, according to the minutes released on Thursday.
"Rapidly rising cases of COVID-19 is the single biggest challenge to ongoing recovery in the Indian economy. Learnings of last one year should, however, help us in managing the crisis as it unfolds," governor said.
The 27th meeting of the Monetary Policy Committee (MPC) had decided to leave benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance, implying rate cuts in the future if need arises to support the economy hit by the COVID-19 pandemic.
Following the meeting of the key rate-setting body, the RBI reduced the key policy rate by 40 basis points, bringing it down to a historic low of 4 per cent.
All the six members of the MPC, including Das, were of the opinion that the impact of COVID-19 on the economy was more adverse than the initially expected as the lockdown was imposed with an aim to check the spread of the coronavirus pandemic, the minutes showed.
Michael Patra, DG, RBI