Rate cut would help in reviving economic growth without worsening the inflationary situation: MPC's Nagesh Kumar

RBI MPC member Dr. Nagesh Kumar advocated for a 25-basis point repo rate cut and a 50-basis point CRR reduction to stimulate economic growth without exacerbating inflation. He and Prof. Ram Singh dissented from the majority decision to hold the repo rate at 6.5% for the eleventh consecutive time due to inflation concerns.

The Reserve Bank of India's Monetary Policy Committee Member Dr Nagesh Kumar on Friday said that repo rate cut would help in reviving economic growth without worsening the inflationary situation.
 

"I believe that a rate cut would help in reviving economic growth without worsening the inflationary situation, which may soften with seasonal correction in prices. Hence, I will again vote for a 25-basis point cut in the repo rate while keeping a neutral stance. In addition, we should also explore the use of non-rate measures for enhancing liquidity, such as a 50-basis point cut in CRR, to help enhance liquidity," he said according to the MPC minutes shared by the central bank.


Kumar further voted against keeping the repo rate unchanged, along with Prof. Ram Singh who was the only other member to vote the same. Both the members voted to reduce the rate by 25 basis points to 6.25%.