The RBI Monetary Policy Committee (MPC) decided to keep interest rates unchanged, and maintain the policy stance at "accommodative", amid high inflation and some signs of economic recovery. While announcing the decision, RBI Governor Shaktikanta Das said that 2020 had been "extremely challenging".“It has tested and stressed our capabilities and our inner reserves of strength, patience and fortitude,” he said.
Quoting Mahatma Gandhi, he said that strength comes from an indomitable will and drawing lessons from this, the RBI will try to set a vision for the way forward.
Das also said that 2020 will be recorded as a defining year in modern civilisation marked by the COVID-19 pandemic, comparable in scale to Spanish Flu and economic losses exceeding the Great Depression of 1930," Das added.
"Alongside this human and economic strategy, the history will also recall unprecedented response by Central governments, banks, healthcare systems, civil societies and above all, the common people," he said.
Das further said that India successfully contained human losses, ensured financial systems function normally and also reached out to the most vulnerable. "Near-time financial losses have been contained," Das noted.
He said that RBI's role as debt manager and banker to the government was tested to the hilt in 2020. "Marked by the highest ever level of market borrowing, our policies resulted in lowest ever borrowing cost in 16 years," he said, adding "we need to be competitive and not combative."
"Throughout this period, the Reserve Bank acted preemptively to face head-on the challenges posed by the virus and manage the fallout of the pandemic on the Indian economy. Our overall endeavour is that going forward, output and employment losses get quickly recouped in an environment of macroeconomic and financial stability," he said.Follow Moneycontrol's entire RBI Monetary Policy coverage here.