Mumbai, Inflationary risks and uncertain global economic scenario led the RBI to adopt the new calibrated tightening stance on interest rates, according to the minutes of the central bank’s latest Monetary Policy Committee (MPC) meeting released on Friday.
“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.
“aCalibrated 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.