The minutes of RBI monetary policy committee meet reveal increasing concerns over inflation by the panel members. The minutes also clearly highlight that further rates hikes may be required to ensure inflation is brought under control and meets RBI's target.
The recent monetary policy committee meet, saw a surprise decision to keep the repo rate unchanged.
The minutes of that meet, released on Thursday, show that all members of the MPC were in favour of a pause in the rates. Calling it a 'tactical pause' and not a pivot or a change in direction, RBI governor pointed out that the war against inflation is far from over.
Highlighting two new risks to inflation (output cut by OPEC and the possibility of a deficient monsoon), Prof. Jayant Varma said that "it would be premature to declare an end to this tightening cycle".
"The process of getting inflation back to target could turn out to be gradual and uneven", said Dr. Michael Debabrata Patra.