Reserve Bank Governor Sanjay Malhotra opined that rate reduction was an appropriate monetary policy response at this juncture citing movement of inflation towards the central bank's 4 per cent target, said the MPC meeting minutes released on Friday.
Malhotra, along with five other members of the Monetary Policy Committee (MPC) had voted for a 25 basis points reduction in the short-term lending rate (repo) to 6.25 per cent. The RBI at its meeting held from February 5 to 7 effected the rate cut after a gap of five years.
"Given the macroeconomic outlook when inflation is expected to align with the target, and recognising that monetary policy is forward-looking, I view a lower policy rate to be more appropriate at the current juncture," Malhotra said, according to the minutes.
Chairing his first MPC meeting, he had also pointed out that rising uncertainties on global financial markets and trade policy front, coupled with continuing risk of adverse weather events pose risks to the ...