Most rate panel members wary of volatile food prices – Times of India

Most rate panel members wary of volatile food prices - Times of India

MUMBAI: Minutes of the RBI’s Monetary Policy Committee meeting held earlier this month show that most members were apprehensive about inflation. Uncertainty in food prices was clouding the outlook for overall inflation. RBI Governor Shakti Kanta Das said.
“In November and December, a resurgence in vegetable price inflation is likely to add to food and headline inflation. We are very alert for any signs of normalization of price continuation,” Das said. have to remain which can derail the ongoing process of disinflation,” said Das.
Jayant R VermaThe most paranoid of the members, said that food prices would rise, but they would be temporary and suggested that the nominal policy rate be calibrated so that the real interest rate is expected to rise two to five quarters. A little below 1.5 percent on an inflation-adjusted basis. Forward. Verma was the only member who voted against it. MPC A decision to focus on housing returns. The MPC had unanimously voted to keep the repo rate at 6.5%.
Deputy Governor Michael Patra He said that inflation is highly vulnerable to rising food prices. Recurring events are causing price pressures to accumulate in the system and may perpetuate inflation, he added.
“In my view, food prices in India are the real core component of inflation. They also create idiosyncratic externalities that affect expectations as well as other components of inflation. Regardless of the fact that “Early shocks emanate from outside its sphere of influence, act quickly to prevent generalization,” Patra said.
of RBI Rajeev Ranjan Going forward, core inflationary pressures may remain muted, as monetary policy actions materialize and modest increases in input costs and manufacturing sector sales prices maintain price pressures, he said. “Concerns over higher food inflation, however, are a major source of uncertainty for the inflation outlook,” he said.
“The MPC minutes expressed members’ optimism about stable domestic demand and the elimination of growth risks on the external front. The pace of inflation remains relatively uncertain, however. The consensus holding for the December meeting shows that members are waiting and remain in the mood to see, but with a softening of their former prejudices,” said Rahul BajoriaAn economist with Barclays. On growth, members noted that domestic consumption is expected to grow on the back of continued strengthening of manufacturing activities, boom in construction, and gradual recovery of the rural sector.

Business news,Shakti Kanta Das,RBI,Rajeev Ranjan,Rahul Bajoria,MPC,Michael Patra,Jayant R Verma,Barclays

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