RBI MPC Minutes: Neutral Stance, Rate Cut

Mumbai, Jun 20 (PTI) RBI Governor Sanjay Malhotra suggested that a change in monetary policy stance to neutral will provide the necessary flexibility to the central bank to 'cut, pause or hike policy rate' in response to the evolving domestic and global economic conditions, as per the minutes of the rate-setting panel meeting issued on Friday.

On June 6, the RBI governor-headed six-member panel reduced the benchmark short-term lending rate by 50 basis points, taking the total reduction to 100 bps in quick succession, besides a change in the policy stance to neutral from accommodative.

"This package of measures will provide some certainty in times of uncertainty and is expected to support growth," Malhotra said during the three-day meeting of the Monetary Policy Committee (MPC).

While five members voted for a 50 bps reduction in the repo rate, an external member of the panel, Saugata Bhattacharya, suggested a 25 bps cut.