The minutes of the Reserve Bank’s August policy meeting show the first signs of dissent as MPC member Jayanth Varma argued that a hike in the reverse repo rate and a change in policy stance would be prudent to show that the committee remains committed to reining in inflation. But most members – including Governor Shaktikanta Das – appear more concerned about the downside risks to the economic recovery. That supports our view that policy will remain loose for a long while yet.
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