New Delhi. In the Monetary Policy Committee (MPC) meeting, Reserve Bank (RBI) Governor Shaktikanta Das had said that the main reason for the slow reduction in retail inflation is the high food prices. In the MPC meeting held earlier this month, the members voted to maintain the policy rates at 6.50 percent. Four members voted in favor of keeping the repo rate unchanged while two members opposed it.

According to the minutes of the MPC meeting, 'Das said that retail inflation is coming down, but its pace is very slow and the main reason for this is that food inflation is not decreasing in that proportion.' He also emphasized that a normal monsoon can eventually reduce the price pressure of major food items. Inflation may temporarily and once again go below the target rate in the June quarter due to large favorable base effects, but it may rise again in the third and fourth quarters of the current financial year.

MPC members Shashank Bhide, Rajiv Ranjan (RBI executive director), Michael Debabrata Patra (RBI deputy governor) and Das voted to keep the policy repo rate unchanged at 6.50 per cent. MPC external members Ashima Goyal and Jayant R Varma voted in favour of reducing policy rates by 25 basis points.

Two members of the RBI committee have advocated a rate cut at a time when some developed economies like Switzerland, Sweden, Canada and the European region have already started giving concessions in interest rates during 2024. On the other hand, the expectations of interest rate cuts in the US, which were high earlier, have come down.

While announcing the monetary policy decision, RBI Governor Shaktikanta Das said that there is a view that the principle of the bank in the matter of monetary policy is to 'follow the Fed' i.e. to follow the decisions of the US central bank Federal Reserve. But, in reality it is not so.