The RBI published Monetary Policy Committee minutes of the scheduled meeting on Oct 9th, that saw status quo on repo rate even as the stance shifted to ‘neutral’ from ‘withdrawal of accommodation’.
Download ReportQuantEco Research || MPC Minutes - Incoming data to validate policy stance
Minutes saw an agreement on the comforting trajectory of inflation in the medium-term. However, volatility in food prices in the near-term is likely to result in a temporary hump in inflation during Sep-Oct 2024. While the MPC members acknowledge the moderation in activity momentum in Q2 FY25, most believe it to be temporary as enablers like focus on budgetary capex, improvement in manufacturing capacity utilization, healthy twin balance sheets, and the anticipated recovery in rural consumption, would continue to provide fillip. Most members agreed that the growth-inflation balance in India is currently well poised. However, amidst the emerging global and near-term domestic food price uncertainties, the MPC would require greater policy flexibility to take data dependent actions.