RBI MPC Minutes: Emphasizing Price Stability for Sustained Growth, Elevated Risk of Food Inflation

In today’s statement, the central bank underscored the significance of maintaining price stability amidst unpredictable factors such as supply-side shocks from adverse climate events and geopolitical tensions. These uncertainties and their impact on agricultural production and spillovers to trade and commodity markets contribute to the outlook’s complexity. The MPC asserts that ensuring enduring price stability is essential for laying the robust groundwork for a phase of elevated growth.

During its recent bi-monthly MPC meeting on April 5, the RBI opted to maintain the benchmark interest rate (repo rate) at 6.5%, citing concerns over inflation. Five members, including Dr. Michael Debabrata, Shashanka Bhide, Ashima Goyal, and Rajiv Ranjan, advocated maintaining the status quo on the policy rate for the seventh consecutive time. However, Jayanth R Varma proposed a 25 basis points reduction in the policy repo rate.

The Reserve Bank of India (RBI) released the minutes of the Monetary Policy Committee (MPC) meeting on Friday, April 19, emphasizing the continued necessity for an actively disinflationary policy to anchor the inflation target and ensure comprehensive transmission. The RBI’s rate-setting panel reiterates that enduring price stability is fundamental for fostering a phase of robust growth.

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