Intensity and the duration of West Asia conflict and the resultant damage add risk to the inflation and growth outlooks: MPC minutes

Uncertainties triggered by the West Asia crisis and its impact on inflation, as well as growth, weighed on the RBI monetary setting panel members' decision as they voted for the status quo on interest rates this month, according to the MPC meeting minutes released on Wednesday. The MPC noted that the intensity and the duration of the conflict in West Asia and the resultant damage to the energy and other infrastructure add risk to the inflation and growth outlooks. However, the fundamentals of the Indian economy are on a stronger footing, providing it with greater resilience to withstand shocks now than in the past. The economy is confronted with a supply shock. It is prudent to wait and watch the changing circumstances and the evolving growth-inflation outlook. Accordingly, the MPC voted to keep the policy rate unchanged even as it remains vigilant, closely monitoring incoming information and assessing the balance of risks. The MPC also decided to continue with the neutral stance, retaining the flexibility to respond judiciously to incoming information.