RBI Governor Shaktikanta Das has warned that persistently high inflation is a major concern for the economy even as economic activity picks up, as he votes earlier this month to raise key interest rates by 50 basis points to control price rises. , as announced by the central bank as of Wednesday’s minutes.
The six-member Monetary Policy Committee (MPC), led by Das, announced its decision on June 8. It was the second consecutive increase in the repo rate.
According to the minutes of the three-day meeting, the governor said that while high inflation remains the main concern, the rebound in economic activity remains steady and gaining momentum.
“The time is right to move for further policy rate hikes to effectively address inflation and inflation expectations.
“Therefore, I am voting for a 50 basis point increase in the repo rate, which would be in line with evolving inflation-growth dynamics and will help mitigate the second-round effects of adverse supply shocks,” he said.
The rate hike, he said, will reinforce RBI’s commitment to price stability – its primary mandate and a precondition for sustainable growth in the medium term.
All six members voted to raise the policy repo rate by 50 basis points (bps) to 4.9 percent.