RBI’s 3-Day Policy Review Begins Wednesday As Centre Names Panel Members

RBI's 3-Day Policy Review Begins Wednesday As Centre Names Panel Members

The RBI is widely expected to maintain a status quo on key policy rates in its upcoming statement

The Reserve Bank of India on Tuesday announced that its Monetary Policy Committee will conduct its bi-monthly review meeting from October 7 to October 9. The development came a day after the government named three new nominees on the Monetary Policy Committee to replace appointees whose terms ended in September. The RBI is widely expected to maintain a status quo on key policy rates in its upcoming statement, due at the end of the three-day meeting.

Here are 10 things to know:

  1. All 66 respondents in a poll by news agency Reuters expect the repo rate to remain unchanged at 4.0 per cent and a large majority see no cuts until the January-March quarter. The RBI will then likely stay on hold until the end of 2021.

  2. The central bank may for the first time since February provide guidance on how the economy is performing amid the coronavirus pandemic.

  3. Last week, the RBI had postponed its bi-monthly committee meeting, which was originally scheduled from September 29 to October 1, as it required at least four MPC members to proceed and the government had failed to name replacements for outgoing appointees.

  4. The Monetary Policy Committee comprises three government nominees and three RBI members.

  5. In a statement late on Monday, the Centre said Shashanka Bhide, Ashima Goyal and Jayanth Varma were its nominees on the central bank’s Monetary Policy Committee (MPC).

  6. Shashanka Bhide is a senior advisor at the National Council for Applied Economic Research, a New Delhi-based think-tank, whose work has involved research into agriculture, poverty analysis and macroeconomics.

  7. Ashima Goyal is a member of Prime Minister Narendra Modi’s economic advisory council. She is a professor at the Indira Gandhi Institute of Development Research in Mumbai and was a visiting fellow at Yale University.

  8. Jayanth Varma is a finance and accounting professor at the Indian Institute of Management, Ahmedabad. He was formerly on the board of the country’s capital markets’ regulator.

  9. The new members have been appointed for a four-year term, according the official notification.

  10. The RBI has reiterated its commitment to manage high retail inflation and retain an “accommodative” stance of policy for as long as necessary to revive growth. It has already slashed rates by 115 basis points in response to the COVID-19 pandemic since late March.

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