Government yet to name MPC nominees – Times of India

NEW DELHI: Typically, it is the Reserve Bank of India (RBI) governor who is at the centre of attention ahead of the Monetary Policy Committee (MPC) meeting. But this time, all eyes are on the Capital’s Raisina Hill as the central bank awaits clarity on the government’s nominees on the crucial panel that decides the trajectory of interest rates.
While the MPC meeting is due to commence on Tuesday, the government is yet to name its nominees on the six-member committee with the possibility of the meeting being postponed not ruled out if the Centre fails to act by Monday.
The MPC, set up a few years ago, has six members, including the RBI governor, deputy governor and an executive director. In addition, there are three members nominated by the government. The tenure of the first set of external members — Chetan Ghate, Pami Dua and Ravindra H Dholakia — ended recently and the government is yet to announce their replacement.
Officials said that the process will not be impacted even if the government announces the members on Monday. “Whoever will be appointed will be well-versed with the current economic situation and it will not be a problem even if the appointments are made on Monday. In case that does not happen, the RBI will have to go for a short postponement of the meeting, which is unlikely,” said a source.
The committee is widely expected to opt for status quo on interest rates, given that inflation remains elevated and was estimated at 6.7% in August. The mandate for the central bank is to ensure that inflation stays in a 2-6% band.
While the RBI is obliged to explain to Parliament if pace of price rise remains over 6% for three consecutive quarters, the central bank is citing the absence of data during April and May to argue that it does not owe any explanation in the current scenario.