Three new members appointed to RBI's MPC; monetary policy meet on October 9

The central government has appointed three eminent economists Ashima Goyal, Jayanth R Varma and Shashanka Bhide as external members of the rate-setting Monetary Policy Committee of the Reserve Bank of India. Following the appointment, the RBI announced that the meeting of the MPC will held between October 7 to October 9.

The RBI had postponed its last meeting of MPC beginning 29 September as the appointment of independent members was delayed.  The tenure of its three external members - Ravindra Dholakia, Pami Dua and Chetan Ghate - ended in September. They were appointed to the MPC in 2016 with a mandate to maintain consumer prices within a 2-6 per cent range.

"The meeting of the Monetary Policy Committee (MPC) during September 29, 30 and October 1, 2020 is being rescheduled. The dates of the MPC's meeting will be announced shortly," the central bank had notified on September 28.

The Appointments Committee of the Cabinet (ACC), headed by the Prime Minister, approved the appointments after the term of the earlier nominees ended in September.

According to the RBI Act, three out of the six-member Monetary Policy Committee (MPC) are external delegates appointed to the panel for a term of four years and are not eligible for re-appointment.

Newly-appointed member Shashanka Bhide is senior advisor at the National Council for Applied Economic Research, while Ashima Goyal is a professor at the Indira Gandhi Institute of Development Research. Jayanth R Varma is professor at the Indian Institute of Management, Ahmedabad.

Other members on the panel are RBI Governor Shaktikanta Das, his deputy Michael Patra and executive director Janak Raj.

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

The MPC has been given the mandate to maintain annual retail inflation at 4 per cent until March 31, 2021, with an upper tolerance of 6 per cent and a lower tolerance of 2 per cent.

The retail inflation which is measured by the Consumer Price Index (CPI) stood at 6.69 per cent in the month of August, higher than the central bank's upper margin of 6 per cent.

The last meeting of the MPC was held from August 4 to 6, 2020. It was the 24th meeting of the rating-setting panel.

By Chitranjan Kumar

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