Majority of external members of the Reserve Bank of India’s Technical Advisory Committee (TAC) were in favour of increasing the policy repo rate by 25 basis points at the RBI’s last policy review, in line with RBI Governor Raghuram Rajan’s decision on October 29.
Four of the TAC’s external members backed the rate increase, alongside a 25 basis point cut in the marginal standing facility (MSF) rate, minutes of a pre-policy meeting released on Thursday showed. The RBI raised the repo rate to 7.75 per cent and cut the MSF, an overnight rate, by 25 bps to 8.75 per cent, restoring the gap between the two rates to the customary 100 basis points.
Two external members of the committee wanted no change in the repo rate, while one wanted a cut, the minutes showed.
TAC acts as a proxy policy committee, which is advisory in nature. RBI Governor has the final say in the monetary policy formulation.