Indianomics: RBI's monetary policy in focus, experts discuss

The minutes of the Reserve Bank of India’s (RBI) monetary policy committee meeting were released on Thursday. The minutes show that all members have accepted RBI dovish forecast of inflation at 4.5 percent for FY23.

Dr Jayant Varma was the sole member who took the neutral stance and was against the accommodative stance saying that the pandemic is behind us and hence the accommodative policy has to go. He said rates will have to be raised sometime later and hence a neutral stance is appropriate.

Ashima Goyal, the other non-RBI or external member, strongly supported RBI's position that demand is weak and growth needs an accommodative monetary policy.

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The ground situation both on growth and inflation have changed radically because of the Ukraine war.

Two external members of the MPC - Jayanth R Varma and Ashima Goyal, Professor at Indira Gandhi Institute of Development Research, discussed this further.