INSUBCONTINENT EXCLUSIVE:
MUMBAI: Economic growth is accelerating helping companies utilise their capacities better, but this coupled with higher crude oil prices
could fuel inflation, the minutes of the Monetary Policy Committee (MPC) discussions earlier this month showed.
Improving growth and soaring
inflationary expectations warranted an increase in interest rates though uncertainties in global financial markets and trade wars warranted
that the stance remain neutral giving it elbow room to act depending on the situation, it said.
Almost all the six MPC members acknowledged
improvement in economic conditions while one of them, Michael Patra, executive director at RBI, worried whether the credibility of the
Acharya, said.
The RBI raised key interest rates by 25 basis points at its meeting on June 6 citing the build up of inflationary pressures
due to high crude oil prices through food prices have been benign
But it kept policy stance neutral so that it could be on a prolonged pause if the global geopolitical or financial markets risks do not
also confident of the growth
The economy is on a stronger footing, especially manufacturing
RBI has raised both inflation and growth outlook for the fiscal
Growth is raised to 7.4 per cent in fiscal 2019, and inflation in the second half of the year is seen at 4.7 per cent, up from 4.4 per cent
