Sharp differences among MPC members on future interest rate hikes

The next review of the monetary policy committee is scheduled on December 5-7

Sharp differences in opinion were observed among the members of Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) as some asked for restraint on future hikes in interest rates while others still believe in continuing with aggressive hikes.

The MPC hiked the policy repo rate by 50 basis points (bps) to 5.9 per cent in the last policy review, announced on September 30. Since May, repo rate has been hiked by 190 bps even as inflation stayed stubbornly higher, over 6 per cent — the upper tolerance limit of RBI. (100 bps = 1 percentage points)

External member Jayanth