Mumbai: Four out of the five members in the Reserve Bank of India's (RBI) external panel recommended the central bank keep interest rates on hold at its February 2 policy review, given concerns about accelerating inflation.
Members of the RBI's Technical Advisory Committee also expressed concerns about the impact from a planned $16 billion pay hike for India's public servants set to be unveiled starting this year, according to minutes released on Monday.
Of the four who recommended rates be kept on hold, one suggested the RBI consider an out-of-cycle cut after the government unveils its 2016/17 budget on February 29, citing a weak domestic and global economy.
One member, however, recommended the RBI cut rates by 50 basis points on February 2.
The RBI had cut its key repo policy rate by 125 bps last year but held it at its February 2 review, opting to wait until after the government's annual budget statement at the end February.
The RBI's external panel has no say on monetary policy decisions, though its recommendations are taken into account by RBI Governor Raghuram Rajan.
