Challenging times call for thoughtful policy measures, and the Reserve Bank of India’s (RBI’s) announcements have been a masterstroke in every aspect. In an environment of uncertainty, going beyond textbook economics was a brilliant exposition of using discretion over typical rule-based policies. With the Covid-19 pandemic bringing the world economic activity to a near-standstill, Friday’s monetary policy announcements should also be seen in conjunction with the commitment made by G20 nations to fight this pandemic.

The ultimate economic cost of the pandemic, its impact on supply chains, trade and commodity prices all remain uncertain. Therefore, the RBI has refrained from providing any outlook on gross domestic product (GDP) growth or inflation. However, it has explicitly recognized that measures such as social distancing

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