Policy normalisation process has already kicked off

Overall RBI monetary policy was on expected lines and the policy statement highlighted its commitment to do whatever it takes to ensure financial stability

As expected MPC voted unanimously to leave the policy repo rate unchanged at 4%; but what was unexpected was the divided view (5 to 1 majority) in keeping the stance accommodative. In earlier minutes also, Prof Jayanth Varma expressed his reservations on maintaining the accommodative stance due to inflationary pressures. Reading the minutes of this MPC’s meeting would provide more insights into the MPC’s mind, their discussion around inflation and perhaps provide some guidance of future trajectory on policy normalisation. 
 

India’s economic activity picked up pace in June-July as some states eased pandemic containment measures. High-frequency indicators – e-way bills;