RBI's Monetary Policy Committee unanimously agree to focus on 4% inflation target

The Reserve Bank of India`s (RBI) six-member Monetary Policy Committee (MPC) cited concerns about inflation in holding rates in February, with three of them specifying the need to shift the policy stance to "neutral" from "accommodative," according to minutes from the meeting.

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The minutes were released on Wednesday after the RBI voted 6-0 to hold the repo rate unchanged at 6.25% at its February 7 to 8 meeting, while stunning markets by changing the stance to "neutral."

The minutes showed widespread discomfort about retail prices among the six MPC members, with all of them citing concerns that inflation could quickly accelerate and threaten the RBI`s medium-term target of 4%.

At the same time the members seemed confident that the economic impact from the government`s unexpected move to ban higher value cash would subside, although they continued to believe the RBI needed to be mindful about growth.

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