RBI opts for growth focus over inflation targeting
The RBI’s Monetary Policy Committee (MPC) has admitted that it is critical to give greater importance to the faltering economic growth, as inflation in India well within the monetary policy committee’s (MPC) mandated target. This information was revealed in the minutes of the June meeting of MPC that were released on Thursday. MPC has cut the key interest rate for the third consecutive time in June, and changed its stance to “accommodative,” after data revealed that India is growing at its slowest pace in over four years. Committee member Michael Patra stated during the meeting, “The evolving macroeconomic configuration imparts urgency to strong policy support for the flagging economy in pursuance of the goals set for the MPC.” Retail inflation stood at 3.05% in May, higher than 2.99% in the previous month; but remained within the MPC target.