Centre Reconstitutes MPC: Experts Weigh In Ahead Of RBI Rate Review (Image:RBI)

The Indian government reformed the Monetary Policy Committee (MPC) on Wednesday before the Reserve Bank of India’s (RBI) monetary policy review on October 7-9. Three external experts, Ram Singh, Saugata Bhattacharya, and Nagesh Kumar have been appointed for four years and they join RBI representatives including the Governor and Deputy Governor on the six-member committee.

Government notifies reconstitution of Monetary Policy Committee under the Reserve Bank of India Act, 1934https://t.co/USpPQMcJ8D pic.twitter.com/3zfG76KcuP

— Aashish Chandorkar (@c_aashish) October 2, 2024

Ram Singh, who is a Delhi School of Economics director holds a PhD from Jawaharlal Nehru University and completed his postdoctoral fellowship at Harvard. Saugata Bhattacharya is an economist who specialises in economic and financial markets analysis. Nagesh Kumar is the director of the Institute for Studies in Industrial Development and holds a PhD from the Delhi School of Economics.

The reconstituted MPC may alter the committee’s stance as previous members expressed dissenting views. Also, in August, the MPC kept the repo rate unchanged at 6.5% due to high food inflation and the new appointments replaced Ashima Goyal, Jayanth R Varma, and Shashanka Bhide whose terms end on October 4, 2024.

Also, read| RBI Keeps Repo Rates Unchanged At 6.5%

The Monetary Policy Committee keeps the policy repo rate unvaried at 6.5 per cent and the standing deposit facility (SDF) at 6.25 per cent, the bank rate along with the marginal standing facility (MSF) rate at 6.75 per cent which was announced by the RBI Governor Shaktikanta Das along with the aforementioned team.

The Monetary Policy Committee sets India’s benchmark interest rate which aims to maintain price stability while promoting growth. The RBI Act which was amended in 2016 mandates the MPC to operate the monetary policy framework. The committee consists of the RBI Governor, Deputy Governor, an RBI officer, and three government-appointed experts. It was said that under the flexible inflation targeting regime the RBI aims to keep inflation between 2-6% and target 4% on a durable basis likely to make it possible with the new team.

Also, read| India’s Growth Story Remains Unharmed, Says RBI Governor