The Reserve Bank of India (RBI) on Thursday said it has decided to reschedule the Monetary Policy Committee’s (MPC) meeting to August 3-5 due to “administrative exigencies”. Earlier, the meeting was scheduled for August 2-4.
“Due to administrative exigencies, it has been decided to reschedule the MPC meeting from August 2-4, 2022 to August 3-5, 2022,” the RBI said in a statement on Thursday.
The August meeting is the fourth meeting of the MPC to review interest rates in the country, including an off-cycle monetary policy review meeting in May in which it raised the repo rate by 40 basis points to control inflation.
For the financial year 2022-23, six bi-monthly monetary policy meetings were originally scheduled by the RBI. However, the high inflation in the country prompted the central bank to conduct an additional off-cycle policy meet in May to hike the repo rate.
After the August meeting, the RBI’s Monetary Policy Committee is scheduled to meet three more times during the current financial year during — September 28-30; December 5-7; and February 6-8, 2023.
The six-member MPC, headed by RBI Governor Shaktikanta Das, announces the bi-monthly monetary policy after deliberations on the current domestic and international economic situations. The RBI has a government mandate to keep the retail inflation under check at four per cent with a up/ down flexibility of two per cent.
India’s Consumer Price Index (CPI)-based inflation in June stood at 7.01 per cent. It was the sixth month in a row when the retail inflation remained above the RBI’s tolerance limit of six per cent. However, this is the second consecutive month that has seen a slight easing in inflation as compared to the previous month. The inflation in April had stood at 7.79 per cent, which fell to 7.04 per cent in May and now to 7.01 per cent in June.
During June, the core inflation, which excludes food and fuel segments, stood at 6 per cent. The food inflation was at 7.75 per cent in June, compared with 7.97 per cent during the preceding month. As per the data, the inflation print in vegetables eased to 17.37 per cent during the month from 18.26 per cent in May, while for ‘pulses and products’ it slowed to (-) 1.02 per cent against (-)0.42 per cent.
In the previous two policy reviews in May and June, the rate-setting panel hiked the key repo rate by 90 basis points — 40 basis points in May and 50 basis points in June.
In the June policy review, the MPC also decided to remain focused on the withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. The marginal standing facility rate and the bank rate were also increased to 5.15 per cent from 4.65 per cent.
Now, in its July 2022 Bulletin, the RBI has “there are indications that inflation may be peaking” and the required monetary policy actions in India will be more moderate than elsewhere in the world and that “we will be able to bring inflation back to target within a two-year time span”.
Experts believe that the RBI may hike the repo rate by 75-90 bps in policy meets till December and in August, it is likely to raise the rate by 35-50 basis points to rein in inflation.
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