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Apart from the decision on the repo rate hike by the Reserve Bank of India's (<keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>) Monetary Policy Committee (<keyword id="6369693" type="General" weightage="20" keywordseo="mpc" source="Orion">MPC</keyword>) at its upcoming meeting, one can also expect few more things post the discussions.<br /><br />Economic experts expect the <keyword id="15698737" type="General" weightage="20" keywordseo="mpc-to-hike-the-repo-rate" source="Orion">MPC to hike the repo rate</keyword> by 25-35 basis points (bps) with industry lobby body ASSOCHAM also urging the central bank to do the same.<br /><br />Further it will also be interesting to see whether there will be unanimity amongst the members of the MPC on the decisions taken at the ensuing meeting.<br /><br />Post MPC meeting, the RBI Governor Shaktikanta Das is expected to share what the bank has written to the central government as to the reasons for not controlling the inflation and the steps that are being taken to reign in the same.<br /><br />The MPC had met on November 3, to discuss what it would tell the central government on the reasons why it was not able to restrain the inflation.<br /><br />As per the Section 45ZN of the RBI Act, when the central bank fails to meet the inflation target, it shall send a report to the Central government listing: the reasons for failure to achieve the inflation target; remedial actions proposed to be taken by it; and an estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions.<br /><br />The proceedings of the said MPC meeting have not been made public even though the law provides to the contrary.<br /><br />As per section 45ZK, the RBI shall publish, after the conclusion of every meeting of MPC, the resolution adopted by the said Committee.<br /><br />Further, as per the Section 45ZL of the RBI Act, the minutes of the MPC meeting has to be published on the 14th day after every meeting including: the resolution adopted at the meeting of the MPC; the vote of each member of the MPC, ascribed to such member, on resolutions adopted in the said meeting; and the statement of each member of the MPC under sub-section (11) of Section 45ZL on the resolutions adopted in the said meeting.<br /><br />On the issue of unanimity amongst the MPC members, at the September MPC meeting, Dr. Ashima Goyal voted against the resolution to hike the repo rate by 50 basis points to 5.90 per cent.<br /><br />Goyal was for a hike of 35 basis points and explaining his reasons voted against the resolution.<br /><br />However, the resolution was passed by a 5:1 majority.<br /><br />In India, the retail inflation rose to 7.41 per cent in September.<br /><br />At the same meeting, another member Prof. Jayanth R. Varma voted against the second part of the resolution on the withdrawal of accommodation to ensure inflation remains within the target.<br /><br />Varma said the MPC should now pause rather than focus on further tightening.<br /><br />On the issue of upward rate revision, he was for upward revision by 60 basis points instead of 50 basis points that was proposed.<br /><br />As the difference between the two was only marginal Varma voted in favour.<br /><br />Be that as it may, the expectation of the MPC meeting is that the repo rate hike will be a moderate one and range between 25-35 bps.<br /><br />The RBI has hiked the repo rate by 190 bps from four per cent to 5.90 per cent. Now MPC will take into account the gross domestic product (GDP) growth estimates, the foodgrain production estimates, inflation projection, global economic activity and other factors.<br /><br />"The RBI will be presenting the monetary policy against the backdro p of GDP growth slowing down as well as inflation being high above six per cent," Madan Sabnavis, Chief Economist, Bank of Baroda said.<br /><br />According to him, the MPC will continue with rate hikes this time though the magnitude will be lower - probably 25-35 bps,<br /><br />"More specifically we do believe that the terminal repo rate for th e financial year will be 6.5 per cent, which means there will be one more rate hike in February. It is unlikely to change the stance and the withdrawal of liquidity will continue," he added.<br /><br />"We expect a 35 bps rate hike in the upcoming meeting. The Consumer Price Index (CPI) inflation is likely to moderate further in the coming months and slip below six per cent by the end of the fiscal year," Rajani Sinha, Chief Economist, CARE Ratings told IANS.<br /><br />She also said the Wholesale Price Index (WPI) has also fallen sharply from 16 per cent in May/June to around eight per cent.<br /><br />"The fall in global commodity prices comes as a big relief. However, the concern is that core inflation in India still remains high above six per cent. Food inflation and specifically cereal inflation is also high," Sinha pointed out.<br /><br />This, in turn, will put upward pressure on household inflationary expectations which is already at a high of around 10 per cent. Hence, while there is some reprieve on the inflation front, RBI would remain vigilant, she added.<br /><br />On the growth front, high frequency economic indicators like auto sales, GST collection, e-way bill, PMI continue to indicate healthy recovery. However, some consumption indicators like IIP consumer durables and non-durables remain weak, Sinha said.<br /><br />Moreover, external demand is weakening as the global economy slows down, Sinha said.<br /><br />According to K. Joseph Thomas, Head Research, Emkay Wealth, as far as interest rates go, the trajectory of domestic inflation is of prime importance.<br /><br />"The pressure seems to be easing on the price level, but the comfor t that can be drawn from fuel prices is far from real. The upside risks in fuel prices continue to be a concern," he said.<br /><strong>SEE ALSO:</strong><br /><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/investment-intent-of-10-5-lakh-crore-received-at-odisha-biz-summit/articleshow/95974094.cms" style="">Investment intent of ₹10.5 lakh crore received at Odisha biz summit</a><br /><a target="_blank" class="c-link c-message_attachment__title_link" href="http://businessinsider.in/stock-market/news/indian-markets-open-the-week-on-a-mixed-note-sbi-maruti-suzuki-inox-green-energy-among-stocks-in-focus/articleshow/95991254.cms" style="">Indian markets open the week on a mixed note – SBI, Maruti Suzuki, Inox Green Energy among stocks in focus</a><br />

RBI's MPC meeting could throw up a lot more than just a rate hike, say experts

Mumbai (Maharashtra) [India], April 5 (ANI): <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> Governor Shaktikanta Das will announce the outcome of the first <keyword id="6375120" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="Orion">Monetary Policy Committee</keyword> (MPC) meeting of the financial year 2024-2025 on Friday.<br /><br />The central banking authority of India has kept the <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword> unchanged for the last six consecutive MPC meetings and according to experts it is likely to maintain the status quo on interest rates this time too.<br /><br />The repo rate, is the interest rate at which banks draw funds from <keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword> to overcome short-term liquidity mismatches.<br /><br />Monetary Policy Committee was constituted under the Reserve Bank of India Act, 1934. MPC is a six-member committee comprising three members from RBI including Governor Shaktikanta Das and three members appointed by the Central government.<br /><br />The two-day review meeting of the MPC that commenced on April 3 concludes today. <br /><br />The RBI had maintained the status quo on policy rates and stances in its last review, which was held in February 2024. The decision however was not unanimous and one member has recommended a rate cut of 25 basis points and policy change stand to neutral.<br /><br />Since the last policy, rating agencies have revised India's growth forecast upwards.<br /><br /><keyword id="7706673" type="General" weightage="20" keywordseo="Finance-Minister-Nirmala-Sitharaman" source="Orion">Finance Minister Nirmala Sitharaman</keyword>, recently said that India will grow over 8 per cent in FY24.<br /><br />Inflation has dropped and has remained under the range of comfort zone. Consumer Price Index inflation was 5.1 per cent in February 2024, up from over 5.5 per cent in December 2023.<br /><br />The core CPI inflation, excluding food and beverages, was at a low of 3.5 per cent in February 2024. However, food inflation at above 7 per cent was a concern, but with a recent cut in the prices of petrol, diesel and LPG, it is likely to further fall in March and may come below 5 per cent.<br /><br />Meanwhile, the India Meteorological Department's (IMD) recent announcement of above-normal temperatures during April-June may be a concern regarding rise in prices of vegetable, fruits and other perishable items.<br /><br />Also prices of rice, pulses have shown an upward trend which may be a concern for the MPC while taking a decision. However, softening prices of non-food items will give some relief to the committee.<br /><br />Generally, normal monsoons follow above normal temperatures, presuming that the average CPI inflation is likely to be in the RBI's comfort zone of 4-6 per cent in FY25. <br /><br />According to official data, retail inflation in India eased a tad in February to 5.09 per cent from 5.10 per cent the prior month, due to the deceleration of prices in all categories except food. <br /><br />Experts believe that the RBI is unlikely to change its policy stance before the August 2024 MPC review and any rate cut is unlikely before that.<br /><br />The US Fed has also recently indicated that it is not in a hurry to cut rates. All these suggest that the RBI, too, is unlikely to go for a rate cut before the October 2024 policy.<br /><br />The next MPC meetings of the RBI have been scheduled this year for June, August, October, December and February 2025.<br />

RBI Monetary Policy Meeting: Central Bank likely to keep rates steady

The Reserve Bank of India (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) has started its three-day monetary policy committee (MPC) meeting in Mumbai on Tuesday. The meeting will conclude on Thursday, when the RBI will announce its decisions on the <keyword id="20094323" type="General" weightage="100" keywordseo="repo-rate" source="keywords">repo rate</keyword> and other matters.<br /><br />The repo rate, which has been maintained at 6.5 per cent since it was last increased in February 2023, is widely expected by experts to remain unchanged for the ninth consecutive bi-monthly policy review.<br /><br />Experts highlight that <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> in India remains above the RBI's target range, making it unlikely that the central bank will implement policy cuts until inflation reaches the target of 4 per cent. However, the expert added that the RBI may consider rate cuts in the October meeting.<br /><br />Banking expert Ashutosh Khajuria commented: "Monetary Policy Committee (MPC) may continue to hold the policy signalling Repo rate and wait for <keyword id="19979707" type="General" weightage="20" keywordseo="Consumer-Price-Inflation" source="keywords">Consumer Price Inflation</keyword> to decisively fall below 4 per cent, the target rate. For the present, the continuation of the current stance is widely expected. MPC in India may change the stance and rate action by the beginning of the second half of the year in their October meeting at the earliest."<br /><br />The experts also noted that while <keyword id="20196112" type="General" weightage="20" keywordseo="core-inflation" source="keywords">core inflation</keyword> has been contained and commodity prices, particularly metals, have dropped by 15-20 per cent from their 2024 peak, food inflation remains a concern and needs to be closely monitored to ensure stability in overall CPI numbers.<br /><br />The Managing Director of a major bank, who preferred not to be named, told ANI: "During the last policy meeting we could see some voting in favour of a <keyword id="19920203" type="General" weightage="20" keywordseo="rate-cut" source="keywords">rate cut</keyword>. At the same time, we could see The Reserve Bank of India's (RBI) Governor Shaktikanta Das on July 11 said it is too early to talk on the interest rate cut due to the uncertain economic environment and inflation remaining close to five per cent. Considering both, our expectation is that the rate cut cycle may start from the next meeting and no change in <keyword id="19950650" type="General" weightage="20" keywordseo="interest-rates" source="keywords">interest rates</keyword> this time."<br /><br />RBI Governor Shaktikanta Das had also emphasised in the last policy briefing that food inflation is still a concern and that the regulator is not in a hurry to make a decision on rate cuts.<br /><br />A recent report by the State Bank of India (SBI) also noted that Consumer Price Inflation in India is expected to remain around 5 per cent for the financial year 2024-25, except for the months of September and October. <br />

Repo rate cut unlikely in ongoing MPC meeting, but RBI may change it during October policy review: Experts

Mumbai, Apr 20 () The Reserve Bank of India on Monday announced the calendar of the meetings of the Monetary Policy Committee (MPC) for the current financial year, and decision of the first meet will be announced on June 5.<p> The RBI governor-headed committee will meet for five times during the financial year 2020-21.</p><p> The previous MPC meeting was advanced in view of the COVID-19 outbreak to March 24, 26 and 27 from originally scheduled for March 31, April 1 and 3.</p><p> The MPC in the previous meeting decided to sharply cut the repo rate by 75 basis points as the coronavirus outbreak led to the lockdown in the country adversely affecting economic activities.</p><p> The six-member MPC has met for 22 times. The first meeting was held in October 2016.</p><p> As per the schedule announced by the RBI, the next Monetary Policy Committee meeting will take place during June 3 to 5. The MPC decision is announced on the last day of the meeting.</p><p> The other meetings will take place on August 4 to 6, 2020; September 29-30 and October 1, 2020; December 2 to 4, 2020; and February 3 to 5, 2021.</p> According to the Reserve Bank of India Act, 1934, the central bank is required to organise at least four meetings of the MPC in a year.  NKD CS  HRS

Next meeting of rate-setting MPC scheduled for Jun 3-5: RBI

Will there be unanimity amongst the members of the Reserve Bank of India's (<keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword>) <keyword id="6375120" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="Orion">Monetary Policy Committee</keyword> (MPC) on the decisions to be taken at their <keyword id="15379699" type="General" weightage="20" keywordseo="November-3-meeting" source="Orion">November 3 meeting</keyword> is the question that pops up.<br /><br />The reason being that at the MPC meeting held in September, one member voted against the resolution hiking the repo rate by 50 basis points to 5.90 per cent.<br /><br />And in the August meeting too there were differences of views on the resolution that was passed.<br /><br />"Even at the upcoming meeting each one will have a view which will be considered by the RBI is what I believe. That will be put in the letter to the Central Government," a senior economist told IANS preferring anonymity.<br /><br />The RBI has scheduled the November 3 meeting of MPC under Section 45ZN of the RBI Act.<br /><br />As per the said Section, when the RBI fails to meet the inflation target, it shall send a report to the Central government listing: (a) the reasons for failure to achieve the inflation target; (b) remedial actions proposed to be taken by it; and (c) an estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions.<br /><br />The MPC at its upcoming meeting will discuss what it would tell the Centre as to why it was not able to restrain the inflation.<br /><br />The RBI may also sound out the Central government as to the course of inflation as well as the reasons as to why it may be at the elevated levels.<br /><br />In India, the retail inflation rose to 7.41 per cent in September.<br /><br />At the MPC meeting held in September, Dr. Ashima Goyal voted against the resolution to hike the repo rate by 50 basis points to 5.90 per cent.<br /><br />Goyal was for a hike of 35 basis points and explaining his reasons voted against the resolution.<br /><br />However, the resolution was passed by a 5:1 majority.<br /><br />At the same meeting, another member Prof. Jayanth R. Varma voted against the second part of the resolution on the withdrawal of accommodation to ensure inflation remains within the target.<br /><br />Varma said the MPC should now pause rather than focus on further tightening .<br /><br />On the issue of upward rate revision, he was for upward revision by 60 basis points instead of 50 basis points that was proposed.<br /><br />As the difference between the two was only marginal Varma voted in favour.<br /><br />RBI Governor Shaktikanta Das had said the communication with the central government is a privileged one and it will not be made public by the Bank.<br /><br />However as per Section 45ZL of the RBI Act, the minutes of the MPC meeting has to be published.<br /><strong>SEE ALSO:</strong><br /><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/global-smartphone-market-sinks-to-lowest-q3-level-since-2014/articleshow/95163037.cms" style="">Global smartphone market sinks to lowest Q3 level since 2014</a><br /><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rbi-can-argue-its-case-on-inflation-control-say-experts/articleshow/95158091.cms" style="">RBI can argue its case on inflation control say experts</a><br />

Will the views of RBI MPC members converge or diverge at Nov 3 meeting?

<p class="p1"><div class="image-container float_right"><div class="image"><p class="source">REUTERS/Ralph Orlowski</p></div></div>A spate of <keyword id="46318" type="UNKNOWN" weightage="60" keywordseo="central-banks">central banks</keyword> are meeting this week to kick off 2014 and set monetary policy going forward.</p>
<p class="p1">Thursday morning, the European Central Bank will end its meeting, and analysts expect the bank to hold the rate at 0.25%.</p>
<p class="p1">England Korea will also meet. <span style="line-height: 1.5em;">Societe Generale has a complete preview of the week. From their note:</span></p>
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<p><strong>England</strong></p>
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<p style="padding-left: 30px;">In this first MPC meeting of 2014, the Committee will take stock of the radically improved state of the economy over the past year. Just over a year ago, in the November 2012 Inflation Report, the MPC predicted 2013 growth of 1.2% but then downgraded that to 0.9% in February 2013 but since then its 2013 forecast has been steadily increased to 1.6%. However, far more dramatic has been the increase in the 2014 forecast from 2.0% to 3.4% from November 2012 to November 2013. This states most eloquently just how much more optimistic the MPC has become about the outlook. But should that raise concerns about inflation pressures? <span>Not in general - at the same time, the inflation performance has improved. The rate of inflation has fallen 2.1% yoy. This takes some of the pressure off the MPC to tighten policy. </span></p>
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<p style="padding-left: 30px;">After much talk of the <keyword id="60971" type="CITY" weightage="60" keywordseo="ECB">ECB</keyword>'s remaining options, expectations have settled down following the December meeting. Unless we see outright deflation risks, we expect no major changes in standard policy measures in the short term. Instead, the focus is likely to be on liquidity supporting measures, with focus turning increasingly to the Comprehensive Assessment (CA). While significant gains are possible from breaking financial fragmentation, we are concerned with the latest proposals for the Resolution Mechanism, in particular the lack of capital backstops which ultimately may compromise the credibility of the CA. The risk of fragmentation continuing after 2014 thus remains high. The January Governing Council meeting is likely to take stock of these challenges, while keeping policy rates unchanged. </p>
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<p style="padding-left: 30px;"><span>All the market participants, including ourselves, </span><span>don't </span><span>expect any changes to the BoK</span><span>'</span><span>s policy rates or its current neutral policy stance at the Monetary Policy Committee (MPC) meeting on 9 January. The BoK reiterated its recent view on the Korean economy in the official 2014 Monetary Policy Directions released on 26 December 2013. It expects a sustained recovery in both exports and domestic demand, and anticipates a rise in inflation due to the narrowing deflationary output gap and the end of temporary impacts from welfare programmes.</span></p>
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There Are 3 Big Central Bank Announcements Coming Up

Mumbai: The Reserve Bank is unlikely to cut the benchmark <keyword id="20071327" type="General" weightage="20" keywordseo="interest-rate" source="keywords">interest rate</keyword> in its forthcoming bi-monthly monetary policy review later in the week as <keyword id="19999652" type="General" weightage="20" keywordseo="retail-inflation" source="keywords">retail inflation</keyword> is still a cause of concern, and there is a possibility of the Middle East crisis deteriorating further, impacting crude oil and commodity prices, say experts. Earlier this month, the government reconstituted the Reserve Bank's rate-setting panel -- <keyword id="19913109" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="keywords">Monetary Policy Committee</keyword> (MPC). The reconstituted panel, with three newly appointed external members, will commence its maiden meeting on Monday. MPC Chairman RBI Governor Shaktikanta Das will reveal the outcome of the three-day discussion on Wednesday (October 9). <br /><br />The <keyword id="19899810" type="General" weightage="100" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (RBI) has kept the repo or short-term lending rate unchanged at 6.5 per cent since February 2023, and experts think some easing could only be possible in December. <br /><br />The government has tasked the central bank to ensure that Consumer Price Index (CPI) based retail inflation remains at 4 per cent with a margin of 2 per cent on either side. <br /><br />In the current context, experts feel that the RBI may not follow the US Federal Reserve, which lowered the benchmark rates by 50 basis points, and the central banks of some developed nations, which have reduced the interest rates. <br /><br />"We do not expect any change in the <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword> or stance by MPC. The reason is that inflation for September and October will be above 5 per cent, and the present low inflation is due to the base effect. Besides, core inflation is inching upwards," said Madan Sabnavis, Chief Economist, Bank of Baroda. <br /><br />Further, the recent Iran-Israel imbroglio can intensify, and there is uncertainty here, he said. <br /><br />"Hence, the status quo is the most likely option even for new members. Inflation forecast may be lowered by 10-20 bps and no change in GDP forecast likely," said Sabnavis. <br /><br />The central bank last hiked the repo rate to 6.5 per cent in February 2023 and since then, it has held the rate at the same level. <br /><br />Icra Chief Economist Aditi Nayar said that given the undershooting in the initial first quarter GDP growth relative to the MPC's forecast and the likely sizeable undershooting in the second quarter CPI inflation print as well, "we believe a stance change to neutral may be appropriate in the October 2024 policy review". <br /><br />This could be followed by a shallow rate-cutting cycle of 25 bps each in December 2024 and February 2025, she added. <br /><br />"The abundant monsoon offers some insurance for crop inflation. The impact of global political developments and geopolitical uncertainty on the growth inflation dynamics remains a risk," Nayar added. <br /><br />An HSBC report said three developments stand out -- softer growth numbers have trickled in recently, inflation has been falling, and the external environment has moved from rate hikes to cuts. <br /><br />"We believe the RBI doesn't gain from waiting any longer. We think it will change its stance from a hawkish 'withdrawal of accommodation' to 'neutral' in the upcoming 9 October policy meeting, followed by repo rate cuts of 25 bps each in the December and February meetings, taking the repo rate to 6 per cent," the report said. <br /><br />The RBI kept the repo rate unchanged at 6.5 per cent in its August bi-monthly review amid risks from higher food inflation. <br /><br />This was the ninth consecutive MPC meeting, which decided to maintain the status quo on the rate front. <br /><br />Pradeep Aggarwal, founder and chairman, Signature Global (India) Limited, said while the real estate industry, developer community, and homebuyers are hoping for an interest rate cut in the upcoming monetary policy review, the RBI is likely to hold on to the interest rate cuts for the tenth consecutive time. <br /><br />"The apex bank still seems uncomfortable with the overall retail inflation scenario, particularly food inflation. As such, it is expected to maintain the status quo. The recent interest rate cut by the US Federal Reserve has ignited similar hopes even in India, but the domestic scenario is very different," he added. <br /><br />SBM Bank India Head Treasury Mandar Pitale believed that the MPC has persistently advocated a restrictive policy until inflation aligns durably towards the 4 per cent target. <br /><br />"With the unfavourable base effect taking the next couple of CPI prints near 5 per cent plus or minus, it will pose a major challenge for MPC to start easing from the October meeting," Pitale said, adding that the MPC is also expected to deliberate upon the global factors like growth-inflation behaviour in developed economies. <br /><br />The government has appointed Ram Singh, Saugata Bhattacharya, and Nagesh Kumar as external members of the MPC. They have replaced Ashima Goyal, Shashanka Bhide, and Jayanth R Varma. <br /><br />Apart from the Governor, the other internal members are the RBI Deputy Governor in charge of monetary policy Michael Debabrata Patra and the Executive Director monetary policy department of RBI Rajiv Ranjan. <br /><br />In an off-cycle meeting in May 2022, the MPC raised the policy rate by 40 basis points and it was followed by rate hikes of varying sizes, in the subsequent meetings till February 2023. The repo rate was raised by 250 basis points cumulatively between May 2022 and February 2023.

Status-quo on interest rate likely, say experts ahead of RBI's policy review

New Delhi, Dec 19 () Soaring onion prices figured prominently in the deliberations of the high-powered rating setting panel of the Reserve Bank as it voted for status quo in interest rates this month, according to the minutes of the MPC meeting released on Thursday.
<p> Onion prices are ruling high since September and were in the range of Rs 130-140 a kilogram in Delhi on Friday.
</p><p> "Headline inflation rose sharply in September and further in October, driven up by a sudden spike in prices of vegetables as kharif crop was damaged due to unseasonal rains in many parts of the country; increase in prices of onion was particularly sharp," RBI Governor Shaktikanta Das said in the Monetary Policy Committee (MPC) meeting while voting for status quo in the key interest rate.
</p><p> The six-member MPC, headed by Das, had kept the repo rate unchanged on December 5 despite moderation in economic growth and easing inflation.
</p><p> Along with him, all the other five MPC members -- Chetan Ghate, Pami Dua, Ravindra H Dholakia, Michael Debabrata Patra, and Bibhu Prasad Kanungo -- had voted to retain the repo rate at 5.15 per cent.
</p><p> Echoing Das, RBI Deputy Governor Kanungo opined that unseasonal rains in October and early November damaged certain crops and disrupted the mandi arrival patterns.
</p><p> "As a result, the temporary demand supply imbalance led to price pressures in several vegetables, especially onion prices," he said, as per the minutes.
</p><p> Governor Das further said overall, several uncertainties cloud the growth-inflation outlook.
</p><p> "First, the surge in food inflation in last three months, driven up by a spike in onion and other vegetable prices, could be transitory. It is likely to reverse gradually as late kharif output comes to the market," he said.
</p><p> In view of this, even as the current food price spike driven by vegetables can be looked through, there is a need for greater clarity as to how the overall food inflation path is going to evolve as there is some uncertainty about the outlook of prices of certain non-vegetable food items such as cereals, pulses, milk and sugar, Das said.
</p><p> It is also not clear at this stage as to how the recent increase in telecom charges will play out, even as CPI (retail) inflation excluding food and fuel has moderated, he said.
</p><p> Onion prices have risen by 81 per cent in the last one month and are ruling above the Rs 100 per kg mark for the third week in a row in most cities, as government efforts to cool the rates seem to be taking more time than expected.
</p><p> Onion prices have shot up as domestic production in kharif and late-kharif seasons (summer-sown) is estimated to have declined by 22 per cent.
</p> The government has been maintaining that it has taken all possible steps to rein in prices such as allowing imports, imposing a ban on exports and putting restrictions on the quantity of onion which can be stocked by retailers and wholesalers.   NKD CS ABM
ABM

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RBI's MPC meeting could throw up a lot more than just a rate hike, say experts

IANS

RBI Monetary Policy Meeting: Central Bank likely to keep rates steady

ANI

Repo rate cut unlikely in ongoing MPC meeting, but RBI may change it during October policy review: Experts

ANI

Next meeting of rate-setting MPC scheduled for Jun 3-5: RBI

PTI

Will the views of RBI MPC members converge or diverge at Nov 3 meeting?

IANS

There Are 3 Big Central Bank Announcements Coming Up

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