All members expressed a consensus for a pause on April 8, favoring a “no change” stance on the repo rate. They also indicated that a rate hike appears unlikely in the near future, assuming that the current disruptions are temporary.
Sonal Varma pointed out that markets are presently disoriented due to uncertainties regarding the duration and effects of the current shock. She emphasized that the central bank should prioritize effective communication and remain vigilant to potential second-round inflation risks.
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Samiran Chakraborty stated that the RBI should uphold stability in its approach and refrain from responding to currency fluctuations via rate adjustments. He underscored that interest rates should primarily aim at managing inflation instead of defending the exchange rate.
Regarding liquidity, Soumya Kanti Ghosh mentioned that the central bank might need to gradually adjust conditions. He noted that the RBI can fine-tune liquidity based on changing market dynamics.
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Sajjid Chinoy emphasized the complexity of the current landscape, describing it as a stagflationary shock impacting both growth and inflation. He suggested that policymakers might need to prioritize growth if the risks escalate.
He added that supply disruptions, particularly in the energy sector, could have nonlinear effects on economic activity, potentially leading to slowdowns in production.
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