Stubborn food prices delaying cisinflation: RBI Guv at MPC

‘Headline CPI inflation is moderating, but at a very slow pace and the last mile of disinflation is turning out to be gradual and protracted’

Stubborn food prices are responsible for the slow pace of decline in overall retail inflation, argued Reserve Bank of India RBI) Governor Shaktikanta Das while voting for a status quo in the policy rates during the MPC meeting earlier this month, according to the minutes released on Friday.

Two external members, however, advocated for a rate cut to push growth in the monetary policy committee meet, it said. Majority of the members of the RBI's rate-setting panel voted for continuation of the key interest rate unchanged to tame inflation, but two external members batted a cut to push economic growth further.

The six-member MPC voted 4:2 in favour of retaining the benchmark interest rate repo) at 6.5 per cent for the eighth time in a row. The meeting took place from June 5-7.

MPC members Shashanka Bhide, Rajiv Ranjan RBI executive director), Michael Debabrata Patra RBI deputy governor), and Das voted to keep the policy repo rate unchanged at 6.50 per cent.

External members on the MPC Ashima Goyal and Jayanth R Varma had voted to reduce the policy repo rate by 25 basis points (bps).