MUMBAI: Voices for an interest rate cut are growing louder within the Reserve Bank of India's rate-setting panel with external member Ashima Goyal joining another member Jayant R Verma, who has long called for keeping the key policy rate as low as possible. Are advocating a reduction of up to 25 basis points.
The Monetary Policy Committee of the Reserve Bank voted for status quo in the repo rate, with four members voting in favor and two against.
"Dr. Shashank Bhide, Dr. Rajeev Ranjan, Dr. Michael Debabrata Patra and Mr. Shaktikanta Das voted to keep the policy repo rate unchanged at 6.50 per cent.
"Dr Ashima Goyal and Professor Jayant R Verma voted to reduce the policy repo rate by 25 basis points," according to the Monetary Policy Statement, 2024-25 resolution of the Monetary Policy Committee (MPC) released by the central bank.
Goyal, Verma and Bhide are outside members in the MPC.Ranjan, Patra and Das are RBI officers.
In the MPC meetings of February 2024 and December 2023, Verma had made a case for reducing the benchmark interest rate by 25 basis points.
This time, Goyal also joined in and voted for the rate cut.
The six-member MPC takes decisions on the basis of majority vote.
The two members, who advocated for rate cuts, are coming closer to starting a rate easing cycle during 2024 by some central banks of advanced economies like Switzerland, Sweden, Canada and the euro zone.On the other hand, market expectations of a rate cut by the US Federal Reserve, which were high earlier, have since decreased.
Unveiling the monetary policy, Governor Das said that there is a view that in matters of monetary policy the Reserve Bank is guided by the principle of 'follow the Fed'.
“I would like to say clearly that while we keep an eye on whether clouds are forming or clearing in the distant horizon, we play the game as per the local weather and pitch conditions.
"In other words, while we consider the impact of monetary policy in advanced economies on Indian markets, our actions are primarily dictated by domestic growth-inflation conditions and outlook," Das said.
The Reserve Bank of India is keeping the key interest rate (repo) at 6.5 percent from February 2023.
The Monetary Policy Committee of the Reserve Bank voted for status quo in the repo rate, with four members voting in favor and two against.
"Dr. Shashank Bhide, Dr. Rajeev Ranjan, Dr. Michael Debabrata Patra and Mr. Shaktikanta Das voted to keep the policy repo rate unchanged at 6.50 per cent.
"Dr Ashima Goyal and Professor Jayant R Verma voted to reduce the policy repo rate by 25 basis points," according to the Monetary Policy Statement, 2024-25 resolution of the Monetary Policy Committee (MPC) released by the central bank.
Goyal, Verma and Bhide are outside members in the MPC.Ranjan, Patra and Das are RBI officers.
In the MPC meetings of February 2024 and December 2023, Verma had made a case for reducing the benchmark interest rate by 25 basis points.
This time, Goyal also joined in and voted for the rate cut.
The six-member MPC takes decisions on the basis of majority vote.
The two members, who advocated for rate cuts, are coming closer to starting a rate easing cycle during 2024 by some central banks of advanced economies like Switzerland, Sweden, Canada and the euro zone.On the other hand, market expectations of a rate cut by the US Federal Reserve, which were high earlier, have since decreased.
Unveiling the monetary policy, Governor Das said that there is a view that in matters of monetary policy the Reserve Bank is guided by the principle of 'follow the Fed'.
“I would like to say clearly that while we keep an eye on whether clouds are forming or clearing in the distant horizon, we play the game as per the local weather and pitch conditions.
"In other words, while we consider the impact of monetary policy in advanced economies on Indian markets, our actions are primarily dictated by domestic growth-inflation conditions and outlook," Das said.
The Reserve Bank of India is keeping the key interest rate (repo) at 6.5 percent from February 2023.
