Michael Patra, lone dissenter in MPC for second time in a row

MUMBAI: The Monetary Policy Committee’s internal member Michael Patra voted in favour of a 25 basis points (a quarter percent) hike in benchmark repo rate at a time the rest five members voted for status quo.

The Reserve Bank’ s monetary policy committee (MPC) voted in favour of holding its key policy rate- the repo rate unchanged at 6% in its meeting on Thursday on estimates of lower inflation and higher growth in 2018-19. It also kept a neutral stance on liquidity.

It forecast GDP growth for 2018-19 higher at 7.4% and inflation for April-September lower at 4.7-5.1%. RBI has expressed its concerns about fiscal slippages impacting inflation and recent volatility in crude prices. But revival in the economy seems to have played a balancing factor to maintain a status quo.


In the February’18 meeting too, Patra had voted for a 25bps rate hike and argued his case to hike rates, citing concerns over the inflation outlook and a turnaround in the state of the economy. He had expressed a similar preference in April last year when he pointed out that "the capex cycle is starting up and pricing power is returning " and that "the output gap is starting to turn up from persistently negative state". He had further argued that "if the statistical reversal of the HRA effect is looked.

The MPC in its statement on Thursday said that since the MPC’s last meeting in February 2018, global economic activity has gathered further momentum, both in advanced and emerging market economies, though financial market volatility and potential trade wars pose a threat to the outlook.