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RBI monetary policy committee turns less hawkish, awaits data, shows minutes

LiveMint logoLiveMint 21-06-2017 Suvashree Dey Choudhury

Mumbai: The Reserve Bank of India’s monetary policy committee welcomed data showing inflation easing below its target, but wanted more assurance the trend would continue before deciding whether to lower interest rates, minutes from its last meeting showed on Wednesday.

RBI’s monetary policy committee voted 5-1 to keep the repo rate at 6.25% earlier this month, but issued a slightly less hawkish statement after the consumer price index (CPI) eased to 2.99% in April, below its 4% inflation target.

Ravindra H. Dholakia, a professor who is one of three non-RBI members, was the lone dissenter, voting to lower the repo rate by 50 basis points by arguing that inflation had eased enough to justify a rate cut.

The vote marked the first non-unanimous decision in the five meetings since the MPC was formed last September.

However, the rest of the panel members, including governor Urjit Patel, wanted more evidence that inflation would ease, while expressing concern that consumer prices would accelerate later this year.


Data after the RBI’s 6-7 June policy meeting showed inflation easing further to 2.18% in May from a year earlier, the lowest in at least five years.

India will post one more inflation data next month before the RBI’s next policy meeting on 1-2 August. Reuters

Swati Bhat, Devidutta Tripathy, Sudipto Ganguly and Euan Rocha also contributed to this story.

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