- Prior 4.50%
- Bank rate vote 8-1 vs 7-2 expected (Dhingra voted to cut bank rate by 25 bps)
- There has been substantial progress on disinflation
- That progress allowed for gradual withdrawal of policy restraint while maintaining restrictiveness
- Global trade policy uncertainty has intensified since last policy meeting
- Other geopolitical uncertainties have also increased
- Indicators of financial market volatility have risen globally
- Business survey indicators generally continue to suggest weakness in growth
- A gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate
- If inflation pressures are pushed down, it warrants a less restrictive path of bank rate
- But if there are second-round effects related to the near-term increase in inflation, this would warrant a relatively tighter monetary policy path
- Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further
- Statement details to follow..
This article was written by Justin Low at www.forexlive.com.
