business
RBI MPC warns of widening inflationary pressures
The RBI MPC warns of widening inflationary pressures and raises the repo rate by 25 basis points to 5.5%.
Key points
- The RBI MPC unanimously voted to increase the repo rate by 25 basis points to 5.5% during its October 5-7 meeting.
- External members Dr Nagesh Kumar and Prof Ram Singh opposed shifting the policy stance from neutral to calibrated tightening.
- MPC members acknowledged risks from the West Asia conflict, rising oil prices, and the spread of inflation.
Why it matters. The shift toward a calibrated tightening stance and the warning of further rate hikes could signal an extended cycle of monetary tightening to combat broadening inflation.
The Reserve Bank of India’s Monetary Policy Committee (MPC) flagged widening inflationary pressures and the risk of second-round price increases in its October deliberations. While the MPC unanimously voted to raise the repo rate by 25 basis points to 5.5%, two external members dissented against shifting the policy stance to calibrated tightening. The RBI governor warned of potential rate hikes as inflation spreads beyond food and fuel.
Latest updates
RBI MPC warns of widening inflationary pressures
The Reserve Bank of India's Monetary Policy Committee (MPC) has highlighted widening inflationary pressures across the economy. Governor Shaktikanta Das warned that rate hikes may be necessary as inflation spreads beyond the food and fuel sectors. However, the hawkish stance faced internal dissent, with two MPC members opposing the move. The committee continues to monitor price stability and macroeconomic indicators.