In the wake of a fresh surge in coronavirus infections, RBI comes with a positive statement. The Reserve Bank of India (RBI) Monday stated Indian economy withstands well against the spike in the COVID-19 cases.
On the other hand, it also spoke about how the spike in infections could endanger restrictions and inflationary pressures, reports The Economic Times.
RBI on COVID-induced pressure
India has undergone major inflationary pressures in the year 2020. Owing to which it is not allowing the government to propose full area lockdown.
However, some states are going for lockdowns. This is necessary in order to break the virus chain. But stricter impositions also could enhance the economic crisis.
RBI stated, “It is noteworthy that economic activity in India is holding up admirably against COVID-19’s renewed onslaught,”
It further added, “Apart from contact-intensive sectors, activity indicators largely remained resilient in March and grew beyond pre-pandemic levels on the back of strong momentum rather than statistical base effects,”
In October, 2020 the International Monetary Fund projected the contraction in India’s GDP from 2020-21, from 4.5 per cent earlier to 10.3 per cent citing the rising COVID-19 cases.
Meanwhile, the central bank assures the economic recovery to speed at full pace. This comes on the basis of points such as, corporate earnings and rapid increase in utilization and consumption of electricity.
RBI raises major concerns about inflation in the light of COVID-19. This happens to be the only hold up for any country. Moreover, majority of the central banks would consider the economic growth during the crisis. This is because inflation at present is stated to be indifferent to the demand pressures previously.
RBI also comes with guarantee to the bond markets. It is for maximum liquidity by the banks. In addition to this it is also responsible to execute the Government’s market borrowing programme of 12.06 trillion rupees.
India’s COVID count for the past 24 hours exceeded 3 lakh. Fatalities crossed the 2,000 mark for the seventh consecutive day. So far April, records the highest peak of cases in the country.