RBI’s monetary policy panel begins three-day meet today

Strap: Expected to hold rates, decision on Oct 9

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Three independent members appointed

– The government has appointed three eminent economists — Ashima Goyal, Jayanth R Varma and Shashanka Bhide — as members of the Monetary Policy Committee

– Bhide is senior adviser at the National Council for Applied Economic Research, while Goyal is a professor at the Indira Gandhi Institute of Development Research. Varma is professor at IIM, Ahmedabad

New Delhi, October 6

The newly-constituted Monetary Policy Committee (MPC) of the RBI will begin its three-day deliberations on Wednesday amid expectations that the central bank this time around may refrain from changing the benchmark lending rates.

On September 28, the RBI had postponed the meeting of the Monetary Policy Committee (MPC), which must have a quorum of four, as the appointment of independent members was delayed. The meeting was scheduled to take place from September 29.

Within a day of the government appointing three independent members of the MPC, the RBI announced the rate-setting panel will meet from October 7 to 9 for the bi-monthly review of the monetary policy.

“…the next meeting of the Monetary Policy Committee (MPC) is scheduled during October 7 to October 9, 2020,” the RBI said in a statement.

The decision of the rate-setting panel will be announced on October 9.

The government has appointed three eminent economists Ashima Goyal, Jayanth R Varma and Shashanka Bhide as members of the MPC.

The new members replace Chetan Ghate, Pami Dua, and Ravindra Dholakia. They were appointed on the panel for four years on September 29, 2016. As per the RBI Act, the external members can hold office for a period of four years and are not eligible for re-appointment.

Bhide is senior adviser at the National Council for Applied Economic Research, while Goyal is a professor at the Indira Gandhi Institute of Development Research. Varma is professor at the Indian Institute of Management, Ahmedabad.

The other three ex-officio members of the MPC are RBI Governor, Deputy Governor (in charge of monetary policy) and one RBI officer to be appointed by the central board.

The six-member MPC headed by RBI Governor has been given the mandate to maintain annual inflation at 4% until March 31, 2021, with an upper tolerance of 6% and a lower tolerance of 2%.

The external members are appointed by the Central government from among persons of ability, integrity and standing, having knowledge and experience in the field of economics, banking, finance or monetary policy.

The last meeting of the panel was held during August 4 to 6, 2020. It was the 24th meeting of the rate-setting panel since it met for the first time in October 2016. — PTI