FX.co ★ RBI Focused On Withdrawal Of Accommodation, Minutes Show

The Reserve Bank of India remained focused on the withdrawal of monetary accommodation, to ensure that inflation remains with the target, without disrupting economic recovery, the minutes of the June meeting showed Wednesday.

At the meeting held on June 6-8, the monetary policy committee unanimously voted to increase the policy repo rate by 50 basis points to 4.90 percent.

The members also unanimously decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

Governor Shaktikanta Das said while high inflation continues to be the major concern, revival of economic activity remains steady and is gaining traction.

The time is appropriate to go for a further increase in the policy rate to effectively deal with inflation and inflation expectations, he said.

"This action will reinforce our 14 commitment to price stability - our primary mandate and a pre-requisite for sustainable growth over the medium term," Das added.