In RBI's Dec 5 MPC minutes, external member Ram Singh advocated shifting monetary policy stance from 'neutral' to 'accommodative' to boost growth amid disinflation. Majority retained neutral despite 25 bps repo cut to 5.25%, balancing inflation risks with economic momentum.
Dissent Revealed
MPC minutes disclosed Ram Singh's solo vote for accommodative stance, arguing rapid disinflation (CPI cooling post-Oct) and Goldilocks economy warrant bolder easing. Governor Malhotra's 5-member majority favored neutral, citing geopolitical/trade uncertainties despite unanimous repo cut. This echoes Oct's surprise easing trajectory.
Policy Implications
Accommodative signals aggressive future cuts; neutral preserves flexibility amid rupee pressures (89.84/USD). Singh highlighted banking consolidation aiding transmission. Markets cheered cut with Nifty Financials +0.65%, Realty +1.4%; next MPC Feb 2026. Minutes underscore growth-inflation tightrope post-8.2% Q2 GDP.
Key Highlights
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Dissent: Ram Singh for 'accommodative' vs. neutral majority.
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Context: Post-25 bps repo cut to 5.25%; unanimous rate vote.
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Rationale: Rapid disinflation, Goldilocks economy supports easing.
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Risks: Geopolitics, trade tensions weigh outlook.
Sources: Moneycontrol MPC Minutes, RBI Policy Statement