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Increased Onion Prices Were Prominent in RBI’s MPC Meet

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Soaring onion prices figured prominently in the deliberations of the high-powered rating setting panel of the Reserve Bank as it voted for status quo in interest rates this month, according to the minutes of the MPC meeting released.

Onion prices are ruling high since September and were in the range of Rs 130-140 a kilogram in Delhi on Friday.

“Headline inflation rose sharply in September and further in October, driven up by a sudden spike in prices of vegetables as kharif crop was damaged due to unseasonal rains in many parts of the country; increase in prices of onion was particularly sharp,” RBI Governor Shaktikanta Das said in the Monetary Policy Committee (MPC) meeting while voting for status quo in the key interest rate.

The six-member MPC, headed by Das, had kept the repo rate unchanged on December 5 despite moderation in economic growth and easing inflation.

Along with him, all the other five MPC members — Chetan Ghate, Pami Dua, Ravindra H Dholakia, Michael Debabrata Patra, and Bibhu Prasad Kanungo — had voted to retain the repo rate at 5.15 per cent.

Echoing Das, RBI Deputy Governor Kanungo opined that unseasonal rains in October and early November damaged certain crops and disrupted the mandi arrival patterns.

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