With the increasing cases of infection, many states have increased restrictions for its prevention. This may adversely affect the revival.
According to the updated data released by the Ministry of Health at 8 am, 58,097 new cases of Covid-19 have been reported in the country in a day. After about 199 days, so many daily cases have been reported. Earlier, 58,419 new cases were reported on 20 June 2021.
According to Abhik Barua, Chief Economist of HDFC Bank, he does not think that RBI’s Monetary Policy Committee (MPC) is going to take any step at the moment to bring monetary policy back to normal levels. At least it is not expected in the next monetary policy review to be held in February.
He also said that in view of the increasing cases of Omicron, there may be an adverse impact of 0.30 percent on the GDP (Gross Domestic Product) growth rate for the March quarter.
Barua said, “The increasing cases of infection and the restrictions imposed for its prevention will have an impact on the growth. In view of this, the possibility of a policy rate hike in February is limited.
UBS Securities Chief Economist Tanvi Gupta Jain also said that India also expects the central bank to adopt a ‘watch and wait’ approach for some more time.
“If the risks to the new Omicron form remain, given the uncertainty associated with it in the short term, we expect the MPC to adopt a ‘watch and wait’ approach at its February policy meeting,” he said. With this, it may delay bringing the policy to the normal level in the monetary policy review meeting in April.
Icra Ratings Chief Economist Aditi Nair said the Reserve Bank will continue with the current stance for some more time in view of the rising risk of weak growth.
He told PTI-language, “The increasing cases of Covid-19 and the restrictions being imposed in various states to curb it have increased uncertainty. Hence, it is unlikely that RBI will make any change in the monetary policy stance next month.
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