MUMBAI: The country’s top central bankers dashed market players’ hopes of RBI following in the footsteps of the US Federal Reserve towards an interest rate cut.
Minutes of the monetary policy committee meeting held on Aug 8 and released on Thursday reveal that the three RBI members were as hawkish as ever even as two external members – Jayanth Varma and Ashima Goyal – took a softer stance in their last meeting.Their views may have no impact as new external members are likely to replace them in the next meeting of the rate-setting panel.
“Persistent food inflation is imparting stickiness to headline inflation. Inflation expectations need to be kept anchored. Spillovers of food inflation to core have to be avoided. At such a crucial juncture, steady growth impulses are allowing monetary policy to unambiguously focus on supporting a sustained descent of inflation to the target. The best contribution that monetary policy can make for sustainable growth is to maintain price stability, said RBI governor Shaktikanta Das in the minutes of the meeting.
Das said that inflation is on a softening path, but persistence in services prices is imparting downward rigidity. “At this stage, when durable disinflation to the target is still a work in progress, the issue of equilibrium natural interest rate is premature,” said Das.
Minutes of the monetary policy committee meeting held on Aug 8 and released on Thursday reveal that the three RBI members were as hawkish as ever even as two external members – Jayanth Varma and Ashima Goyal – took a softer stance in their last meeting.Their views may have no impact as new external members are likely to replace them in the next meeting of the rate-setting panel.
“Persistent food inflation is imparting stickiness to headline inflation. Inflation expectations need to be kept anchored. Spillovers of food inflation to core have to be avoided. At such a crucial juncture, steady growth impulses are allowing monetary policy to unambiguously focus on supporting a sustained descent of inflation to the target. The best contribution that monetary policy can make for sustainable growth is to maintain price stability, said RBI governor Shaktikanta Das in the minutes of the meeting.
Das said that inflation is on a softening path, but persistence in services prices is imparting downward rigidity. “At this stage, when durable disinflation to the target is still a work in progress, the issue of equilibrium natural interest rate is premature,” said Das.
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