MPC Meeting To Be Rescheduled, Says RBI
The Reserve Bank of India logo is displayed on a wall inside the central bank's regional headquarters in New Delhi. (Photographer: T. Narayan/Bloomberg)

MPC Meeting To Be Rescheduled, Says RBI

A meeting of India’s monetary policy committee, scheduled for this week, has been rescheduled.

“The meeting of the MPC during September 29, 30 and October 1, 2020 as announced vide Press Release 2019-2020/2248 dated April 20, 2020 is being rescheduled. The dates of the MPC’s meeting will be announced shortly,” the Reserve Bank of India said in a release on Monday.

The central bank did not ascribe any reason for the delay in the MPC meeting.

The tenure of the three external members on the committee ended in September. As such, Ravindra Dholakia, Chetan Ghate and Pami Dua stepped down from the panel after the August meet. Since then, the government has been deliberating on the new appointments to the committee but has not yet disclosed the names of the new members.

Without the external members, only the RBI appointees remain on the committee. These include Governor Shaktikanta Das, Deputy Governor Michael Patra and Executive Director Mridul Saggar.

Also read: In Charts: The Life And Times Of India’s First Monetary Policy Committee

Economist Views

The MPC was widely expected to keep interest rates unchanged at its meet this week. Elevated inflation would likely push the committee to continue with a status quo on rates despite weak growth, economists said ahead of the meeting.

Yet the meeting was awaited as the central bank was to release its forecasts for growth and inflation for the current year. With government borrowings likely to remain high, steps to keep market interest rates in check were also being watched for.

While it is certainly an unusual occurrence, it is probably justified by the temporary shortage of external MPC members, said Sergi Lanau, deputy chief economist at the Institute of International Finance. “Almost no one in the market was expecting major announcements, which means the delay may not have meaningful economic implications,” Lanau added.

Also read: Resolving A Monetary Policy ‘Multilemma’

Radhika Rao, economist at DBS Bank also said that the decision is unlikely to significantly alter the rate decision path, given that current inflation is uncomfortably high, warranting a pause in the easing cycle. “Authorities might have preferred to wait it out, to ensure that the policy decision is calibrated and balanced by taking the views of both external and central bank participants,” Rao said.

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