SME Times News Bureau | 20 Oct, 2018
The minutes of the central bank's latest Monetary Policy
Committee (MPC) meeting released on Friday said that inflationary risks and
uncertain global economic scenario led the bank to adopt the new calibrated
tightening stance on interest rates.
"Recognising that inflation risks have been persistent, and to reaffirm
the commitment to securing the mandated 4 per cent inflation target on a
durable basis, it is apposite to change the stance of monetary policy from
"neutral" to acalibrated tightening'," said RBI Governor Urjit
Patel was quoted as saying in the minutes of MPC meeting held earlier in this
month.
"A calibrated tightening means that in the current rate cycle, a cut in
the policy repo rate is off the table, and we are not obliged to increase the
rate at every policy meeting."
On Oct 5, RBI held its key lending rate unchanged in the context of an
uncertain global economic scenario but turned hawkish in its stance.
The MPC had decided to keep the repo, or the short-term lending rate for
commercial banks, unchanged at 6.5 per cent.