Subbarao went against suggestion of no repo rate cut in May: panel

Reserve Bank of India governor Duvvuri Subbarao went against the suggestion of a majority of external members of the apex bank's monetary policy committee that recommended no change in repo rate at the annual monetary policy statement for 2013-14 on May 3.

The RBI cut the key policy repo rate for a third straight time in 2013 to 7.25 per cent on May 3, pulling it to a two-year low, in a bid to revive slow growth and taking into account benign inflation reading.

"Reducing the repo rate may not help revive growth, since low growth reflects impediments to investment projects through power/fuel/supply linkages," the three members of the panel said, as per the apex bank's minutes of the meeting held on April 25.

The panel comprises seven external members, and all four deputy governors as well as the RBI governor.

Copyright @ Thomson Reuters 2013