Most on RBI panel backed rate hike ahead of last review

REUTERS - Most external members of a Reserve Bank of India advisory committee were in favour of increasing the policy repo rate by 25 basis points at the central bank's last policy review, in line with RBI Governor Raghuram Rajan's decision on October 29.

Four of the Technical Advisory Committee's external members backed the rate increase, alongside a 25 basis point cut in the marginal standing facility (MSF) rate, minutes of a pre-policy meeting released on Thursday showed.

In the event, the RBI raised the repo rate to 7.75 percent and cut the MSF, an overnight rate, by 25 bps to 8.75 percent, restoring the gap between the two rates to the customary 100 basis points.

Two external members of the committee wanted no change in the repo rate, while one wanted a cut, the minutes showed.

The committee consists of seven external members, apart from the governor and the four deputy governors. The panel's role is purely advisory, with the governor having the final say.

(Reporting by Aradhana Aravindan; Editing by Tony Munroe)