RBI Reschedules MPC Meeting

The Reserve Bank of India (RBI) has September 28, 2020 announced that the bi-monthly Monetary Policy Committee (MPC) meeting that was scheduled to be held from September 29 to October 1, 2020 has been rescheduled. The new dates of the meeting will be announced shortly by mid of October, sources from the RBI said.

The first MPC meeting was held on October 4, 2016 when Urjit Patel was the RBI Governor. The RBI however did not provide any reason behind the rescheduling of the MPC meeting in its statement. The interest-setting panel was scheduled to meet for three-days beginning Tuesday for the bi-monthly monetary policy review. The central bank is awaiting the government’s decision on new external members to the MPC. As per the RBI Act, the MPC’s external members have tenure of four year. The MPC came into existence in October 2016. The RBI MPC meeting is one of the most important events for the banking system and economy as a whole as the central bank announces key measures and sets its key lending rates (repo and reserve repo rates) to check the inflation rate and assess the money flow in the economy.

This year, it has become all the more important as in the wake of the Coronavirus pandemic, the RBI took various steps such as providing loan moratorium and holding open market operations (OMOs) to provide relief to the borrowers and keep a check at the value of rupee against other major currencies. The Chief Investment Strategist at Geojit Financial Services, V K Vijayakumar  said, “In this hour of economic emergency the MPC has to be in place to formulate policy. This delay could have been avoided”.