MPC minutes flag inflation worry; aim to bring CPI within target band by Q4

CPI inflation was 7.04% in May. In its June policy review, the MPC raised repo rate by 50 bps to 4.9%, taking the total tally of rate hikes since May to 90 bps

The minutes of the Monetary Policy Committee’s June 5-8 meeting expectedly showed an increased degree of concern among members regarding upside risks to India’s inflation amid surging commodity prices.

With India’s inflation remaining above the upper bound of the MPC’s 2-6 per cent tolerance band for the first five months of 2022, all members of the rate-setting panel acknowledged the need for further hikes in interest rates, the minutes showed.

“The objective should be to take the repo rate to a height that is at least above the four quarters ahead forecast of inflation, knowing that monetary policy works with