RBI sees rising uncertainty on global outlook

Says continuous policy push for nurturing economy revival; Pvt consumption remains well below pre-pandemic level

Mumbai: RBI Governor Shaktikanta Das pitched for continued policy support to nurture revival in sectors especially those which are exposed to the evolving headwinds in the wake of spread of Omicron variant of Covid, showed MPC minutes released by the central bank on Wednesday.

The Monetary Policy Committee (MPC) on December 8 had unanimously voted for status quo on policy rates for the ninth consecutive time.

As per the minutes, Das said there was growing uncertainty regarding the evolving global macroeconomic outlook. On the domestic front, even as the prospects for economic activity are improving, there is still a slack with key drivers like private consumption remaining well below their pre-pandemic levels, he said.

"Given these uncertainties, continued policy support is warranted for a durable, broad-based and self-sustaining rebound, especially to nurture revival in sectors which are lagging and to safeguard those which are exposed to the evolving headwinds," the Governor said.

MPC member and RBI Deputy Governor Michael Debabrata Patra too expressed concerns on the spread of the new variant of coronavirus, saying "suddenly, the global outlook has darkened". "As countries race to contain Omicron with travel restraints and new quarantine and social distancing measures, the global recovery and the inflation outlook are at risk again," he said. All MPC members, -- Shashanka Bhide, Ashima Goyal, Mridul K. Saggar, Michael Debabrata Patra and Shaktikanta Das, except Jayanth R Varma, voted to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward. Varma had expressed reservations on this part of the MPC resolution, the minutes said.