MPC meet dates announced – The Hindu BusinessLine
[ad_1]
Read More/Less
The Reserve Bank of India (RBI) on Wednesday announced the bi-monthly meeting schedule of the six-member rate-setting monetary policy committee (MPC) for FY2022.
Also read: Jarring signals on economy as inflation is rising, factory output shrinking
Unlike last year, when the first MPC meeting (originally scheduled for March 31, April 1 and 3, 2020) was advanced to March 24, 26 and 27, 2020, and the Governor issued a statement on April 17, 2020 in view of the Covid-19 pandemic, the meeting schedule for FY2022 is spread out evenly.
According to RBI, MPC’s first meeting is scheduled from April 5 to 7, 2021. The subsequent meetings will be held from June 2 to 4, August 4 to 6, October 6 to 8, December 6 to 8, and February 7 to 9, 2022.
Last year, the repo rate (the interest rate at which banks borrow funds from RBI to overcome short-term liquidity mismatches) was cumulatively cut by 115 basis points in two tranches (to 4.40 per cent from 5.15 per cent on March 27, 2020 and to 4 per cent from 4.40 per cent on May 22, 2020), with the accommodative policy stance continuing throughout.
The reverse repo rate (the interest rate banks earn for parking surplus liquidity with RBI) was also cumulatively cut by 65 basis points in two tranches (to 3.75 per cent from 4 per cent on April 17, 2020 and to 3.35 per cent from 3.75 per cent on May 22, 2020).
According to a Barclays report, RBI may maintain its monetary accommodation for a while longer in order to enable the recovery to become entrenched.
Also read: Ten questions for the MPC to consider
The report, ‘Monetary policy: Talking the walk’, observed that recovering output lost to the pandemic could take longer than anticipated, and policy makers will be best served by letting the economy run ‘hot’ for a few quarters.
“The RBI will also need to balance nurturing the recovery and financial stability risks.
“Estimates show that the output gap will be negative well into 2022, and we believe monetary accommodation will be required to support growth recovery,” Rahul Bajoria, Chief India Economist, Barclays Securities (India) Pvt Ltd, and Shreya Sodhani, Research Analyst, Barclays Investment Bank, Singapore.
[ad_2]