Here’s What Else the RBI Can Do as Pandemic Rages on
- Inflation risks have kept benchmark rates steady for a year
- Bond buying programs and loan moratoriums can provide support
Delhi Police block a street during lockdown restrictions in New Delhi, on May 5.
Photographer: Sumit Dayal/BloombergThis article is for subscribers only.
The Reserve Bank of India’s loan relief and liquidity injection plans unveiled Wednesday raise the question: What comes next as it seeks to ease the pandemic’s hit to Asia’s third-largest economy?
Benchmark rates have remained unchanged for a year amid sticky inflation, so the RBI has relied on a string of unorthodox policies. It’s embraced a Federal Reserve-style “‘Operation Twist” and an European Central Bank-style facility known as Targeted Longer-Term Refinancing Operations, as well as its own version of quantitative easing.