A low CPI inflation reading and expectations of GDP growth slowing down ahead allowed the Reserve Bank of India's Monetary Policy Committee to lower interest rates in December, minutes of the committee's Dec. 3-5 meeting, released Friday, showed. MPC members gave little forward guidance in the minutes and said the committee will remain data dependent going ahead.

On Dec. 5, the MPC in a unanimous decision lowered the policy repo rate by 25 basis points to 5.25%. The committee also retained the 'neutral' policy stance, but external member Ram Singh was of the view that the stance should be changed to 'accommodative'. Singh, the minutes revealed, said that an accommodative stance was needed because of the "dormancy in the price momentum underlying headline CPI and CPI core", and also to support the growth momentum. Other members were in favour of retaining the stance as it provides the flexibility to remain data-dependent.