MPC minutes of RBI: Inflation fears, driven by oil prices, led to rate hike

The MPC members raised concerns about the risk to the inflation target due to the impact from MSP rise for crops, elevated crude prices and other factors

Risk of inflationary pressures, triggered by rising crude oil prices, drove five-member of the monetary policy committee (MPC) in its August review to favour a hike in policy rate for the second time in a row. 

While external member Ravindra Dholakia favoured a status quo, all six members voted for the policy stance to remain neutral. 

The MPC members raised concerns about the risk to the inflation target due to the impact from minimum support price (MSP) rise for crops, elevated crude prices and other factors such as increase in house rent allowance and monsoon conditions. Positive growth outlook and indications of