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Voice of caution at RBI’s monetary policy committee meet

External member Jayanth R. Varma said the MPC should not issue any forward guidance in the form of a stance that would tie its hands
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Our Special Correspondent   |   Mumbai   |   Published 23.04.22, 12:30 AM

The meeting of the RBI’s monetary policy committee (MPC) this month saw an interesting turn when external member Jayanth R. Varma voted in favour of remaining accommodative even as he called for dropping any reference to the word “stance’’, which is broadly the guidance or the path the RBI intends to take to propel growth or tame inflation.

Varma, seen as a hawk, said the MPC should not issue any forward guidance in the form of a stance that would tie its hands. 

He pointed out it is necessary to communicate clearly that in the future , the committee would consider itself completely free to take any action on policy rates that may be warranted based on data .

In the February meeting, Varma had voted against the accommodative stance. 

The MPC in April dropped the word stance and said it decided to remain accommodative while focusing on the withdrawal of accommodation to ensure that inflation remains within target  

at it decided to remain accommodative while focusing on the withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

 



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