The rate-setting panel delivers a status-quo policy as it navigates the slippery disinflationary zone amidst worries of supply shocks and global volatility
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) delivered a status-quo policy outcome for the sixth straight time. Remember, it raised the repo rate by 25 basis points from 6.25 percent in February 2023. Since then, the rate-setting panel has unanimously voted to retain the benchmark rate at 6.5 percent and five of its six members voted for a continuation of the policy stance of withdrawal of accommodation. But there was a twist this time.
In the February 8 meeting, the decision to retain the repo rate at 6.5 percent was not unanimous. One of the members, Jayanth Varma, voted for a 25 basis points cut in the repo rate and a clear shift in policy stance from ‘withdrawal of accommodation’ to ‘neutral’. Interestingly, last February, external MPC members, Varma and Ashima, had voted against the 25 basis points rate hike.