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Reserve Bank of India (RBI) Deputy Governor Michael Debabrata Patra said global uncertainty has complicated the fight against inflation. He said this in the meeting of the Monetary Policy Committee earlier this month. The details of the meeting of the Monetary Policy Committee (MPC) were released on Wednesday, in which this information was given. Meanwhile, RBI Governor Shaktikanta Das said that there is a lot of uncertainty due to global factors like increase in non-oil commodity prices. The RBI had increased the policy rate repo by 0.25 per cent to 6.5 per cent citing core inflation in the MPC meeting held on February 6-8. RBI raised the interest rate for the sixth time since May last year. During this period, there was a total increase of 2.5 percent in the rates.
The fight against inflation is complicated from a global perspective
As per the details of the MPC, Patra said, the fight against inflation is complex from a global perspective. There is now some consensus about a more general recession than previously feared, although geographic disparities complicate forecasts. Overall, the global inflation outlook is becoming more uncertain than previously thought. Governor Shaktikanta Das, head of the six-member MPC, also said that overall geo-political tensions, volatility in global financial markets, rise in non-oil commodity prices, volatility in crude prices and weather-related There is uncertainty. He said the 0.25 per cent hike in the policy rate would provide room for future monetary policy actions.
Two members are not in favor of further increase in the policy rate
According to details, two of the three outside members of the MPC — Jayant R Verma and Ashima Goyal — were not in favor of further hike in the policy rate. Shashank Bhide, the third external member, was accompanied by three RBI members. That is, he voted to raise the key policy rate for the sixth time in a row. According to the details, Verma said, monetary policy was complacent on inflation in the second half of 2021-22, and we are paying the price in the form of unacceptably high inflation in 2022-23. He said that monetary policy has become complacent about growth in the second half of 2022-23 and I hope that we do not pay the price for this in the form of unacceptably low growth in 2023-24. Verma said, “I believe that the 0.25 per cent increase in the repo rate by the majority of the MPC has not taken into account the softening of inflation forecasts and the current context of rising growth concerns.” Verma is a professor at the Indian Institute of Management, Ahmedabad. The six-member MPC includes three RBI officials – Governor Shaktikanta Das, Deputy Governor Michael Debabrata Patra, and Executive Director Rajeev Ranjan. The central government appoints three external members to the MPC.
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