Welcome and Encouraging Change in RBI's Monetary policy stance
This refers to the Monetary policy announcement by the Governor RBI(9/10/24) based on the deliberations of the new MPC committee since set up very recently in its recently held meeting meeting. While the RBI has changed its monetary policy stance from accommodative to neutral taking into consideration the benign inflationary conditions, improved consumption, investments and continued strong financial stability, the overall confidence level exhibited on inflation front seems to be hawkish in the background of uncertainties and risks lying ahead, notwithstanding the fact that growth of the economy and inflation are well poised as of now. However, it is noteworthy to observe that though RBI has decided to maintain the status quo keeping the policy rates unchanged, the consensus of all the MPC committee members to such a decision is absent as one new member of the MPC seems to have desired a cut in policy rate. All said, the RBI's stance in the present scenario of disturbed neo- political conditions and uncertainties in the International and domestic economic scenario seems to be accommodative and highly supportive of the economy to move in its fast track as envisaged and motivated by the Government. The change in approach from accommodative to neutral is welcome and encouraging.
T V Gopalakrishnan
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