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RBI’s monetary policy is nearing an inflection point Photo: MintPremium Sonal Varma Share Via Read Full Story The objective of the Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) at the April meeting is straightforward: don’t rock the boat. The second wave has increased the uncertainty around the near-term growth outlook as the peak in caseloads is not yet in sight. Rising infection cases will likely force more states to impose restrictions, disrupting economic normalization. Headline inflation looks likely to surprise 0.3-0.4 percentage points below the RBI’s projection for H1 CY2021, due to lower food prices. The output gap is still negative and the recovery has not yet been secured. Hence, all policy rates on hold and continuing with the accommodative stance appears the right strategy. ....