RBI MPC Minutes - Likely Continuation of Growth Momentum, Firm Guard against spillovers from Persistently high Food Inflation, NIR Debate, Modest MSP Hikes
The RBI released the Minutes of Monetary Policy Committee Meeting held during 5 - 7 June 2024. The estimates of Growth and Inflation are stated below: Key Highlights: 1. Domestic growth is likely to maintain momentum into 2024-25 aided by expectations of a above normal SW Monsoon, Government's continued thrust on capex, projections of improved Global Trade, Healthier Corporate Balance Sheet etc. 2. Pace of last mile of disinflation has been grudgingly slow on intersecting food price shocks, impact of exceptionally hot summer months, rabi production shortfall, upward revision in milk prices. Normal monsoon would likely ease price pressures and also support growth. 3. On the most interesting debate around the Neutral Real Policy Rates (NIR), Dr. Aashima Goyal mentions that NIR is around 1% for India and restated her stance that inflation approaching the target suggests absence of over-heating. She mentions since core inflation has moved steadfastly lower,...