New Delhi [India], April 24 (HBTV): The minutes of the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting held on April 7–9 reflect a clear dovish tone, with growth now taking center stage in the RBI’s policy approach, according to a report by Union Bank of India.

The report noted that MPC members appear more confident about inflation gradually moving towards the 4 per cent target, allowing the committee to shift focus toward supporting economic growth. ‘The minutes, in line with the policy statement, are clearly dovish, with growth gaining a clear policy priority as greater confidence has emerged with respect to inflation trending towards the 4 per cent target,’ it said.

Union Bank highlighted the RBI’s decision to change its monetary policy stance to ‘accommodative’ alongside a widely expected 25 basis‑point rate cut as a significant move. The combination acted as a ‘double booster shot’ for the economy by signaling that interest rates will likely remain low or may even decline further, thereby supporting economic activity through cheaper borrowing.

All MPC members agreed on the rate cut and shift in stance except Saugata Bhattacharya, who preferred to keep the policy stance flexible. Most members clarified that the accommodative stance simply indicates that rate increases are unlikely for now, although the RBI could still pause easing if economic conditions warrant.

The report also observed a downward revision in the RBI’s inflation forecast for FY26 by 20 basis points, bringing it closer to the 4 per cent target and creating additional room for future monetary easing.

While the RBI projected India’s GDP growth at 6.5 per cent for FY26, Union Bank considered this optimistic and pegged growth closer to 6.0 per cent, citing weak capital expenditure sentiment and rising global uncertainties such as trade volatility and unstable capital flows.

Looking ahead, the report expects the RBI to cut the repo rate by another 50 basis points, bringing it to a terminal rate of 5.5 per cent, based on an assumed neutral real interest rate of 1.5 per cent.

Overall, both the MPC minutes and the Union Bank report suggest that the central bank is prioritizing growth as inflation risks appear to be easing.

(ANI)