Monetary policy: RBI surprises with dovish note as growth concerns weigh

Repo rate unchanged at 4%; stance 'accommodative'

The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Thursday took a dovish stance that was contrary to expectations of a formal step of policy normalisation by hiking the reverse repo rate.

All the six members voted to keep the repo rate unchanged for the 10th consecutive policy meeting, and one dissented on maintaining the “accommodative” stance.

The MPC flagged the potential downside risks to economic activities from the contagious Omicron variant of Covid-19 and observed some loss of momentum as reflected in high-frequency indicators -- such as the purchasing managers’ indices for both manufacturing and services,