The Reserve Bank of India (RBI) continues to emphasize the importance of its role in managing inflation, cautioning against premature actions that could undermine progress made in controlling prices, stated RBI Governor Shaktikanta Das.
During the three-day meeting of the Monetary Policy Committee (MPC) from February 6-8, the committee opted to maintain the key policy rate at 6.5 percent for the sixth consecutive time, marking nearly a year since the repo rate remained unchanged at this level.
Reflecting on the MPC meeting in February, Das emphasized the need for ongoing vigilance in monetary policy, stressing that efforts to combat inflation should not be assumed as complete. He highlighted the importance of the MPC's commitment to navigating the remaining challenges in disinflation, cautioning against premature policy shifts.
Das emphasized the significance of price and financial stability in sustaining long-term growth, reaffirming the MPC's objective to achieve the 4 percent inflation target while promoting economic growth.
Among the MPC members, five out of six voted in favor of maintaining the repo rate at 6.5 percent. External member Jayanth R Varma advocated for a 25 basis point reduction in the repo rate and a shift in stance to neutral, citing the scope for monetary easing amidst continued fiscal consolidation.
Deputy Governor Michael Debabrata Patra emphasized the importance of maintaining a restrictive monetary policy to manage inflation while minimizing the impact on output. He highlighted the need for sustained moderation in inflation before considering policy relaxation.
External member Shashanka Bhide stressed the continuation of current policy rates to ensure sustained moderation in inflation. Similarly, Ashima Goyal supported the disinflationary stance and voted for maintaining the status quo.
RBI Executive Director Rajiv Ranjan underscored the importance of steadfastness in policy decisions amidst transition challenges, expressing confidence in India's strong fundamentals to overcome these obstacles.
The next MPC meeting is scheduled for April 3-5.
Read also | Anupam Mittal's Jab at Ashneer Grover: 'The Shark Who Lost His Bite
Read also | Government Permits Export of 54,760 Tons of Onions to Bangladesh, Mauritius, Bahrain, and Bhutan
