RBI MPC: The central government on Tuesday appointed three new external members to the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC), which is responsible for setting the country's interest rates. The newly appointed members — Ram Singh, Saugata Bhattacharya, and Nagesh Kumar — will serve a four-year term.
Ram Singh is the Director of the Delhi School of Economics, Saugata Bhattacharya is a noted economist, and Nagesh Kumar serves as the Director and Chief Executive at the Institute for Studies in Industrial Development in New Delhi. The reconstituted MPC is scheduled to hold its first meeting from October 7 to 9, after which RBI Governor Shaktikanta Das will announce the bi-monthly monetary policy on October 9.
The finance ministry, in a statement, said that these members have been appointed with immediate effect or until further orders, whichever comes earlier. The appointments replace outgoing members Ashima Goyal, Shashanka Bhide, and Jayanth Varma, whose terms recently ended.
The six-member MPC, chaired by the RBI Governor, also includes the Deputy Governor in charge of monetary policy and the Executive Director of the Monetary Policy Department. According to the rules, at least four members must be present for the committee to conduct meetings.
The MPC was originally constituted in 2016 after the finalisation of the Monetary Policy Framework Agreement, which introduced an inflation-targeting regime. The inflation target was set at 4 per cent, with a tolerance band of plus/minus 2 per cent.
In 2020, the appointment process for new MPC members faced delays due to pending security clearances. The search committee responsible for nominating members was led by Cabinet Secretary Rajiv Gauba and included RBI Governor Shaktikanta Das, NITI Aayog Vice-Chairman Suman Bery, and Economic Affairs Secretary Ajay Seth.
The new appointees will contribute to the upcoming policy decisions in the midst of ongoing economic challenges.
Experts anticipate that the Reserve Bank of India's (RBI) upcoming Monetary Policy Committee (MPC) meeting will maintain the policy repo rate unchanged, as the risks to growth and inflation have not shifted significantly. The meeting is set to begin on October 7, with the central bank's key decision on interest rates expected on October 9.