External member Ravindra Dholakia again bats for a rate cut against the odds
, ET Bureau|
Updated: Oct 04, 2017, 04.20 PM IST
NEW DELHI: For the third consecutive time, external member Ravindra Dholakia, a professor at Indian Institute of Management, Ahmedabad again turned out to be the only dissenter in the Monetary Policy committee as he voted in favour of for a policy rate reduction of at least 25 basis points.
Other five members including external member Chetan Ghate and Pami Dua, as well as all internal members - Michael Debabrata Patra, Viral Acharya and Urjit Patel were in favour of the monetary policy decision of a pause in policy rate. The RBI kept the benchmark repo rate, the rate at which it RBI lends to bank, unchanged at 6 per cent while lowering the growth forecast from 7.3 per cent to 6.7 per cent for FY’18.
In a recent research note, Global investment bank, Morgan Stanley has forecast an MPC vote of 5-1 to keep rates on hold while maintaining a neutral stance. "Dr Dholakia will likely continue to press the case for further easing" it had said.
In it August meeting, Dholakia had pushed for a 50 bps rate cut. "As I had argued in the June 7, 2017 meeting of MPC, with a year ahead inflation forecast now brought down to 4 per cent by the RBI and existence of expanding negative output gap, any rule-based policy would suggest a cut in the policy rate by at least 50 basis points" said Dholakia, according to the MPC minutes published in mid-August.
Dholakia had earlier in the June meeting too had voted for a 50 bps rate cut citing easing of inflation among other things.
Other five members including external member Chetan Ghate and Pami Dua, as well as all internal members - Michael Debabrata Patra, Viral Acharya and Urjit Patel were in favour of the monetary policy decision of a pause in policy rate. The RBI kept the benchmark repo rate, the rate at which it RBI lends to bank, unchanged at 6 per cent while lowering the growth forecast from 7.3 per cent to 6.7 per cent for FY’18.
In a recent research note, Global investment bank, Morgan Stanley has forecast an MPC vote of 5-1 to keep rates on hold while maintaining a neutral stance. "Dr Dholakia will likely continue to press the case for further easing" it had said.
In it August meeting, Dholakia had pushed for a 50 bps rate cut. "As I had argued in the June 7, 2017 meeting of MPC, with a year ahead inflation forecast now brought down to 4 per cent by the RBI and existence of expanding negative output gap, any rule-based policy would suggest a cut in the policy rate by at least 50 basis points" said Dholakia, according to the MPC minutes published in mid-August.
Dholakia had earlier in the June meeting too had voted for a 50 bps rate cut citing easing of inflation among other things.
