Mumbai: Reserve Bank of India (RBI) Governor Shaktikanta Das, who voted for the stance of policy rates earlier this month, said in the MPC minutes released on Friday that stubborn food prices are responsible for the slow pace of decline in overall retail inflation. .
The Monetary Policy Committee (MPC) voted 4:2 in favor of keeping the benchmark interest rate (repo) at 6.25 percent for the eighth consecutive time.
According to the minutes of the meeting, Das said in the meeting that headline CPI inflation is coming down, but at a very slow pace and the final phase of disinflation is becoming gradual and prolonged.
"Food inflation is the main factor behind the extremely slow pace of deflation. Recurring and overlapping supply side shocks play a large role in food inflation," the Governor said.
He also stressed that a normal monsoon could ultimately ease price pressures in key food items.
Large favorable base effects could lead to a temporary and one-off decline in inflation in the June quarter, below the target rate, before picking up again in the third and fourth quarters of the current fiscal year.
MPC members Shashank Bhide, Rajiv Ranjan (RBI executive director), Michael Debabrata Patra (RBI deputy governor) and Das voted to keep the policy repo rate unchanged at 6.50 per cent.
The MPC's outside members - Ashima Goyal and Jayant R Verma - had voted to reduce the policy repo rate by 25 basis points.
The Monetary Policy Committee (MPC) voted 4:2 in favor of keeping the benchmark interest rate (repo) at 6.25 percent for the eighth consecutive time.
According to the minutes of the meeting, Das said in the meeting that headline CPI inflation is coming down, but at a very slow pace and the final phase of disinflation is becoming gradual and prolonged.
"Food inflation is the main factor behind the extremely slow pace of deflation. Recurring and overlapping supply side shocks play a large role in food inflation," the Governor said.
He also stressed that a normal monsoon could ultimately ease price pressures in key food items.
Large favorable base effects could lead to a temporary and one-off decline in inflation in the June quarter, below the target rate, before picking up again in the third and fourth quarters of the current fiscal year.
MPC members Shashank Bhide, Rajiv Ranjan (RBI executive director), Michael Debabrata Patra (RBI deputy governor) and Das voted to keep the policy repo rate unchanged at 6.50 per cent.
The MPC's outside members - Ashima Goyal and Jayant R Verma - had voted to reduce the policy repo rate by 25 basis points.
