SBI’s Ecowrap report uncovers diverse views in RBI MPC meeting proceedings; Check the details here

A recent SBI Ecowrap report on the minutes of the MPC meetings reveals a divergence of opinion among its members. It highlights that MPC members have approached the vote from different perspectives. Over time, the voting records of individual members in terms of the political rate have shown considerable diversity.

“Dr Rajiv Ranjan, the only member who has had continuity since the August meeting, has reiterated his position that political action is underway to achieve the target and a window of opportunity to review the position will open in October,” the SBI Ecowrap report revealed. .

However, other members of the commission have expressed different opinions. Two members of the RBI have put a lot of emphasis on inflation concerns. The deputy governor stressed the importance of addressing the factors that contribute to persistent inflation in the domestic market.

However, the RBI governor stressed the need for flexibility to adapt to changing economic conditions. The report also notes that the shift from a withdrawal position to a neutral position is driven by growth considerations.

“The revision of the stance has been influenced by growth imperatives and there is the beginning of a natural slowdown in the economy due to tightening, although the full symptoms have been masked by the ambiguity in the signal relationship -noise”. the report said.

The International Monetary Fund (IMF) has reaffirmed its growth forecast for India at 7% for the current fiscal year ending March 31, 2025, and at 6.5% for the following year. In contrast, global production is expected to grow by 3.2% in both 2024 and 2025.

The report also suggests reducing the deadline for publishing MPC meeting minutes in India from the current 14 days to 7 days.

While the RBI’s practice of releasing MPC minutes two weeks after policy is in line with international best practices, it may lead to public perceptions that new data released after the MPC meeting could influence these acts Therefore, reducing the release time to 7 days would help mitigate this risk.

The RBI would have to amend its regulatory laws to implement this change. The Currency and Finance Report (2020-21) recommends changing the requirement to release minutes from “at 5pm on the 14th day after the policy day” to “at 5pm within seven days subsequent to the announcement of the policy”.

This adjustment would improve the effectiveness and relevance of the RBI’s communication in a rapidly evolving economic landscape, ensuring that stakeholders receive timely information that can inform their economic decisions.

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