According to experts, India’s central bank would likely take its time normalising monetary policy settings, deviating from hawkish global peers to ensure a long-term recovery in Asia’s third-largest economy
For the time being, policymakers would adhere to their determination of maintaining their stance moderate in order to accomplish the growth goal, according to economists such as Anubhuti Sahay of Standard Chartered Plc. Instead, they’ll concentrate on the difficult chore of sponging liquidity away from the economy, leaving just enough to keep things running without contributing to inflationary pressures. Governor of the Reserve Bank of India Shaktikanta Das, who urged for a concerted policy response to the pandemic last year, cited dangers from Omicron this month for maintaining economic assistance, despite requests from a colleague to remove the accommodative bias. The hawkish turn at key global central banks, from the US Federal Reserve to the Bank of England, as they battle inflationary fears, contrasts with India’s approach.