Back
MPC MEETING

MPC additional meet Thu, may discuss target failure

 

Informist, Thursday, Oct 27, 2022

MUMBAI – The Monetary Policy Committee will hold an additional meeting on Thursday, according to a press release issued by the Reserve Bank of India today.

The meeting will be held under provision of Section 45ZN of the Reserve Bank of India Act, 1934, which pertains to drafting the committee's report to the government on failure to meet the inflation targetting mandate.

The Last Time The Committee Met Outside The Scheduled Six Meetings Was In May, When The Repo Rate Was Hiked By 40 Basis Points On May 4

According to the schedule released on Mar 30, the six-member Monetary Policy Committee was scheduled to meet six times in 2022-23 (Apr-Mar). The last meeting was held on Sep 28-30, and the next meet was scheduled on Dec 5-7.

The Section 45ZN of the RBI Act requires a separate meeting of the Monetary Policy Committee to be scheduled to "discuss and draft the report to be sent to the Central Government" after the central bank fails to meet the inflation mandate.

The report should highlight the reasons for failure to achieve the inflation target, remedial actions proposed to be taken by the bank, and estimate of the time-period by when the inflation target shall be achieved, according to the RBI Act.

The central bank is deemed to have failed when average inflation is outside the 2-6% tolerance range for three straight quarters. The RBI failed in its inflation mandate as CPI inflation averaged 6.3% in Jan-Mar, 7.3% in Apr-Jun, and 7.0% in Jul-Sep.

The report has to be sent to the government within one month from the date on which the central bank has failed to meet the inflation target. In this case, the deadline would be Nov 12, one month since the latest inflation print which confirmed the committee's failure to meet its mandate.

"The additional MPC meeting on Nov 03 will be to discuss the response to be sent to government," a source said.

At the outcome of the last policy review in September, RBI Governor Shaktikanta Das had said that the committee would meet again to discuss the central bank's failure on inflation-targetting mandate, in line with legal provisions.

Das, however, declined to share details of what the RBI would discuss ahead of the Monetary Policy Committee's deliberations at that time.

"From our side, we will not make it public because it is a privileged communication from the central bank to the government," Das had said at the time.

The last time the committee met outside the scheduled six meetings was in May, when the repo rate was hiked by 40 basis points on May 4.  End

Reported by Alekh Angre and Shubham Rana

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2022. All rights reserved.

Other News

INTERVIEW: Nomura Sribalasundaram says India gilts not a top pick

Informist, Monday, Dec 4, 2023 –Nomura Sribalasundaram: India gilts certainly not a top pick for us–CONTEXT:Nomura rates strategist Sribalasundaram remarks in interview–Prefer Indonesia, Korea bonds over India–India 5-yr bond, swap spread not too exciting–Gilts may outperform OIS, tighten spreads–1-yr OIS shows liquidity ease, not rate cut–See MPC cutting rates in Aug, before FOMC–See RBI cutting repo rate by 100 bps FY25–Expect clarity on […]

RBI Policy: Who expects what from the MPC on Dec 8

Informist, Monday, Dec 4, 2023 MUMBAI – The following are expectations of economists, treasurers, and mutual fund managers from the Reserve Bank of India's Monetary Policy Committee, whose meeting begins on Tuesday, with the decision due on Friday: SONAL VARMA, MANAGING DIRECTOR AND CHIEF ECONOMIST (INDIA AND ASIA EX-JAPAN) AT NOMURADespite stronger growth, core disinflation has continued, which is likely a comfort […]

RBI Policy: Poll shows MPC to stand pat on repo rate, up GDP forecast

Informist, Monday, Dec 4, 2023 Team Informist NEW DELHI/MUMBAI – The market is unanimous that the Reserve Bank of India's Monetary Policy Committee will keep the policy repo rate and policy stance unchanged for a fifth consecutive time at the outcome of its meeting on Friday, even though higher food prices pose an upside risk to inflation.All 25 respondents in […]