RBI MPC Meeting Minutes: The Monetary Policy Committee of RBI had decided not to make any change in the repo rate in the meeting of the committee held in April and June. But the opinion seems to be divided among the members of the six-member MPC committee regarding the increase in the policy rates in the coming time. This is known from the minutes issued by the RBI of the meeting of the Monetary Policy Committee held on June 6-8.
On June 8, when RBI Governor Shaktikanta Das had announced the policy rates, he had indicated that RBI will continue with the strictness of its monetary policy to control inflation. But RBI MPC’s external member Jayant Verma, who has raised questions about the expensive repo rate in the past, said in his statement in the MPC committee meeting this time that the stance of the Monetary Policy Committee is far from reality. He said that the monetary policy has reached near that dangerous level where it can cause significant damage to the economy.
Ashima Goyal, another member of the Monetary Policy Committee, wrote in her statement that inflation will come down as expected. But it is necessary that there should not be much increase in the repo rate. He said that there is no need to keep the repo rate high for a long time, which will harm the economy.
Although RBI’s own members had a different attitude regarding interest rates in the MPC meeting. They are of the opinion that the focus of RBI is going to be on the challenges arising out of inflation. These people believe that only this policy meeting is enough to stop the increase in the repo rate. And looking at the macroeconomic data in future, RBI will take a decision on the policy rates. RBI Governor Shaktikanta Das said that inflation has been brought within the tolerance band, but so far only half the work has been done in this direction. He said that our war against inflation is not over yet. Shaktikanta Das said that it is not possible to give any guidance regarding future decisions regarding the cycle of hardening of interest rates.
However, after the MPC meeting, the retail inflation rate for the month of May, which has been declared, has come down to 4.25 percent. But the delay in monsoon is working to increase the concern.
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