Premature change in policy action may hurt, warns MPC

Five members of the central bank’s six-member rate-setting committee warned against any premature change in policy action while embarking on the "last mile of disinflation", and voted to keep policy rates unchanged, minutes of its meeting held earlier this month showed.

- Gopika Gopakumar

The monetary policy committee’s (MPC) sixth member Jayanth R. Varma was the lone dissenter, voting for a repo rate cut of 25 basis points.

At the meeting which was held over 6 to 8 February, Reserve Bank of India governor Shaktikanta Das said MPC should not assume that the job on the inflation front was over, while voting for a status quo on policy rates, according to the minutes of the meeting released on Thursday.

"As markets are front-running central banks in anticipation of policy pivots, any premature move may undermine the success achieved so far," Das, who chairs the MPC, said during the meeting. "Policy imperative at the current juncture is to remain focused on achieving the 4% inflation target on a durable basis, keeping in mind the objective of growth."