Accommodative Stance : RBI
The Reserve Bank of India (RBI), in its latest Monetary Policy Committee (MPC) meeting, retained its accommodative stance to support economic recovery amidst moderating inflation and sluggish growth signals.
- An accommodative stance is a monetary policy approach adopted by central banks like the RBI to stimulate economic activity.
- It generally involves keeping interest rates low and ensuring ample liquidity in the system.
- When economic growth slows or is below potential.
- When inflation is low or within target range.
- During periods needing boosts in consumption, investment, and employment.
- In response to financial shocks or global economic uncertainties.
- Objectives of the Accommodative Stance:
- Promote credit flow and private investment.
- Encourage borrowing and spending by lowering the cost of capital.
- Revive demand in the economy.
- Ensure liquidity support to stressed sectors.
