Most of the members of the Technical Advisory Committee (TAC) on Monetary Policy of the RBI had proposed a status quo in policy rates during the first quarter review of the monetary policy on July 31st.
The RBI did not change the repo and reverse repo rates in the policy review.
“Of the seven external members, five suggested that the RBI should not change the policy rate. They felt that given the fiscal dominance, double-digit consumer price inflation and no realistic expectation of credible action from the government, the RBI needs to focus on tempering inflation expectations,” the central bank said.
Some suggestions that did come forward were to maintain adequate liquidity to support growth, reducing the cash reserve ratio (CRR) by 25 basis points or making the open market operations (OMOs) more active.