The Reserve Bank of India (RBI) released the minutes of the Monetary Policy Committee (MPC) meeting on Friday, December 22, highlighting that domestic food inflation unpredictability, and volatility in crude oil prices and financial markets in an uncertain international environment pose risks to the inflation outlook. Hence, the central bank’s monetary policy continues to remain actively disinflationary, according to the MPC minutes.

The MPC observed that the policy must continue to be actively disinflationary to ensure anchoring of inflation expectations and fuller transmission. ‘’The MPC will remain resolute in its commitment to aligning inflation to the target. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth,” said the central bank in its statement. The RBI at its last bi-monthly monetary policy committee (MPC) meeting on December 8 decided to keep the benchmark interest rate (repo rate) unchanged at 6.5 per cent citing inflationary concerns. All six members including M D Patra, Shashanka Bhide, Ashima Goyal, Jayanth R Varma and Rajiv Ranjan voted for status quo on the policy rate for the fifth consecutive time. RBI MPC Minutes: Check the top 5 highlights-1.The central bank said that uncertainties in food prices along with unfavourable base effects are likely to lead to a pick-up in headline inflation in November-December. Kharif harvest arrivals and progress in rabi sowing together with El Niño weather conditions need to be monitored. The path of disinflation needs to be sustained. ‘’The MPC will carefully monitor any signs of generalisation of food price pressures which can fritter away the gains in easing of core inflation,” said the central bank. Taking into account these factors, CPI inflation is projected at 5.4 per cent for 2023-24, with Q3 at 5.6 per cent; and Q4 at 5.2 per cent. 2.: As the cumulative policy repo rate hike is still working its way through the economy, the MPC decided to keep the policy repo rate unchanged at 6.50 per cent in this meeting, but with preparedness to undertake appropriate and timely policy actions, should the situation so warrant. The central bank added that the policy continues to remain actively disinflationary to ensure anchoring of inflation down to the 4 per cent target. The rate-setting panel also decided to focus on withdrawal of accommodation -indicating rates may remain higher for longer, keeping inflation under target. MORE TO COME Livemint tops charts as the fastest growing news website in the world to know more.
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