RBI MPC Meeting Update: The Reserve Bank of India increased the repo rate by a quarter percent or 25 basis points to 6.50 percent in the meeting of the Monetary Policy Committee on 8 February 2023. But in this meeting of monetary policy, Jayant R Verma, a member of the MPC, opposed the one percent increase in the repo rate. He had expressed disagreement with the decision to increase interest rates amidst the concern of decreasing inflation and economic growth. RBI has released the minutes of the monetary policy meeting, from which this information has come to the fore. However, according to the minutes of the MPC meeting, RBI Governor Shaktikanta Das had said that the RBI would stick to its tight monetary policy stance.
Jayant R Verma said in his argument that the repo rate of 6.50 percent is much higher than the policy rates required to maintain stability in prices and there is no need for this increase. He said that most of the MPC members have given their consent to increase the repo rate by 25 basis points but it is not needed in the current situation amid the reduction in inflation estimates and concerns over the growth rate. He said that I vote against the proposal to increase the repo rate.
On February 8, after the MPC meeting, the RBI increased the repo rate by 25 basis points to 6.50 percent. This was the sixth time in 9 months, then due to the rise in inflation, the RBI had decided to increase the repo rate. Of the six members of the MPC, four voted in favor of increasing the repo rate. He believed that the inflation rate is still higher than the target.
Jayant R Verma said that in the second half of the financial year 2021-22, the monetary policy was indifferent to inflation, the cost of which we have to bear in the form of tremendous inflation in 2022-23. He said that in 2023-24 we should not face slow economic growth.
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