RBI reschedules Monetary Policy Committee meeting set to begin from tomorrow; new dates soon
The bank did not provide a reason for rescheduling the key meeting.
The Reserve Bank of India on Monday announced that it has rescheduled the meeting of the Monetary Policy Committee, which was supposed to begin from Tuesday. The central bank said that it will announce the new dates soon.
“The meeting of the Monetary Policy Committee (MPC) during September 29, 30 and October 1, 2020 is being rescheduled,” RBI said in a press release. “The dates of the MPC’s meeting will be announced shortly.”
The bank did not provide a reason for rescheduling the key meeting, though a report in The Economic Times said that the decision may have been taken because of the pending appointment of members of the external committee. The tenure of Chetan Ghate, Pami Dua and Ravindra Dholakia of the committee ended earlier in September.
The last Monetary Policy Committee meeting was held on August 6. The RBI had kept both the repo rate and the reverse repo rate unchanged at 4% and 3.3%, respectively.
The repo rate is the rate at which RBI lends to its clients generally against government securities. The reverse repo rate allows banks to deposit funds with the central bank and earn interest on it.
The Monetary Policy Committee was expected to keep the interest rates unchanged at this week’s meeting too, according to Bloomberg Quint. Economists told the news organisation that the committee was likely to continue with the same rates due to an increase in inflation, despite weak growth. However, the meeting was highly anticipated because the central bank was scheduled to release its growth and inflation forecasts for the current financial year.
Sergi Lanau, deputy chief economist at the Institute of International Finance, told Bloomberg Quint that though the rescheduling of the key meeting was rare, it was justified, given the shortage of external committee members. “Almost no one in the market was expecting major announcements, which means the delay may not have meaningful economic implications,” Lanau said.
But A Prasanna, chief economist at ICICI Securities Primary Dealership Limited in Mumbai, called the decision to postpone the meeting “shambolic”, Bloomberg reported. “The government and RBI had at least three months time to appoint members and yet they have failed,” he said. “This is shambolic. Monetary policy was the only lever providing support to the economy and such uncertainty doesn’t help.”