The higher-than-expected inflation is likely to result in another hike in the policy rate at the MPC’s next meeting on 6th-8th June

Her comments come after the the central bank’s rate-setting panel recently surprised the markets with a 40 basis point hike in repo rate in an off-cycle policy meeting this month.

The central bank's surprise May 4 repo rate hike has sparked concerns that the next couple of meetings of its rate-setting panel will definitely see further increases in the policy rate.

The MPC, in a surprise move on May 4, had hiked the repo rate by 40 basis points to 4.40 percent and increased the cash reserve ratio by 50 basis points amid concerns over high inflation.

In his comments in the MPC minutes, Varma had said the logic of a 40 bps rate cut was not clear to him. He says he believes a decisive rate action can subdue the unpleasant inflationary episode we are witnessing currently, and bring inflation down to target.

The MPC member says a quick and front-loaded rate increase may help the RBI stay ahead of inflation and growth will define the course for equity returns

The MPC member speaks about the rate action in developed markets and things that drive it, including PhD programmes of heads of central banks. This is the second of a two-part series.

RBI policy: Rising capacity utilisation levels in the manufacturing sector are expected to lead to greater investment activity in the coming months