The Minutes of the Monetary Policy Committee Meeting February held between 3 and 5 has been out.
The theme of what all six members have spoken is on the expected line — the threat of inflation looms over the medium term but the accommodative monetary stance will continue even in the next financial year as Priority No 1 for the Reserve Bank of India is GROWTH.
That’s fine. A couple of things may call for special attention.
One: This speech of Prof Jayanth R Varma is the shortest ever by any MPC Member in its history.
“I support maintaining the policy rate at its current level and I also support the accommodative stance as these decisions are consistent with the forward guidance provided by the MPC in its last two meetings (October and December 2020). With both inflation and growth outcomes being well within the range of expectations of the MPC, and short term interest rates being within the corridor defined by the repo and reverse repo rate, there is nothing to be done and there is nothing to be said as of now. The MPC must of course continue to be data driven and must continue to monitor future developments carefully.”
Brief and to the point.
Two: The concluding parts of Bhide’s speech and that of RBI Governor Shaktikanta Das is identical.
Here is what Bhide has said:
“I vote in support of the resolution to keep the policy repo rate unchanged at 4 per cent and further to continue with the accommodative stance as long as necessary – at least during the current financial year and into the next financial year – to revive growth on a durable basis and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.”
“On balance, I vote to keep the policy repo rate unchanged and to continue with the accommodative stance as long as necessary – at least during the current financial year and into the next financial year – to revive growth on a durable basis and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.”
I wonder how could this happen! Any thoughts?
