India’s Central Bank Holds Rate as Virus Surge Risks Recovery By Bloomberg

India’s Central Bank Holds Rate as Virus Surge Risks Recovery By Bloomberg

© Bloomberg. A healthcare worker administers a rapid antigen test near the Gateway of India monument in Mumbai, India, on Wednesday, March 31, 2021. India’s consumption demand and business activity looked steady in February, although chances of a strong recovery appeared doubtful after a sharp surge in virus cases and the increasing risk of renewed lockdowns.

(Bloomberg) — India’s central bank kept interest rates unchanged at a record low, as Asia’s third-largest economy faces fresh headwinds from a second wave of coronavirus infections.

Governor Shaktikanta Das said the six-member Monetary Policy Committee held the benchmark repurchase rate at 4% — a decision predicted by all 30 economists surveyed by Bloomberg. The monetary panel signaled readiness to act to support growth, by retaining its accommodative stance for as long as necessary.

Policy makers had been expected to keep policy accommodative amid continued risks from the Covid-19 crisis. While a nascent recovery in Asia’s third-largest economy has been nudging inflation higher, daily new virus cases hit a record of more than 100,000 this week, pushing some states to impose movement curbs that could hit demand in an economy dependent on consumption.

©2021 Bloomberg L.P.

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