MUMBAI: According to Monetary Policy Committee (MPC) minutes released on Friday, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the central bank will maintain an accommodative stance for as long as necessary to support the economy.

Das said that a resurgence in inflation in May and June above the upper threshold had reignited the debate on the appropriate monetary policy response.

The RBI chief said, "The need of the hour is two-fold: First, continue the monetary policy support to the economy; and second, remain watchful of any durable inflationary pressures and sustained price momentum in key components so as to bring back the CPI inflation to 4 per cent over a period of time in a non-disruptive manner."

"The economy is struggling to regain the momentum that had gathered in the second half of 2020-21. Many current price shocks are likely to be one-off or transitory. Weak demand conditions and low pricing power are limiting the extent of their pass-through to output prices," Das said.

"There is still considerable slack in the economy. Domestic demand is picking up but at a slow pace. Several supply-side measures have been taken by the government to deal with the inflationary pressures, however, more needs to be done. The daily new COVID-19 infections are sticky at around 40,000 cases per day," he added.

Although investment demand was still anaemic, improving capacity utilisation and congenial monetary and financial conditions were preparing the ground for a long-awaited revival, Das said.