The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), led by Governor Shaktikanta Das, is set to meet on Monday to determine key interest rates. The committee will focus on factors such as inflation trends, global economic challenges, and domestic growth projections as it reviews the current monetary policy.
The MPC’s deliberations will conclude on Wednesday with an official announcement of its decision. The central bank has kept the repo rate unchanged at 6.5 percent for the past nine consecutive meetings, striking a balance between controlling inflation and boosting economic growth.
With food and fuel prices surging, inflation remains a pressing concern for the RBI. According to the Ministry of Statistics and Programme Implementation, consumer price inflation in August stood at 3.65 percent, within the RBI’s target range. However, food inflation has exceeded the central bank’s medium-term target, reaching 5.65 percent.
Despite these inflationary pressures, the RBI has maintained its accommodative stance, holding the repo rate steady to support India’s post-pandemic economic recovery. However, external factors such as rising global crude oil prices driven by tensions in West Asia and the U.S. Federal Reserve’s decision to cut interest rates by 50 basis points, could influence the central bank’s position in the near future.
Earlier this month, the central government appointed three new external members to the MPC. The six-member committee is composed of three officials from the RBI and three external members appointed by the government.
The reconstituted MPC includes the RBI Governor as Chairperson, the Deputy Governor responsible for monetary policy, and one officer nominated by the RBI’s Central Board. The newly appointed external members are Professor Ram Singh, Director of the Delhi School of Economics; Saugata Bhattacharya, economist; and Dr. Nagesh Kumar, Director and Chief Executive of the Institute for Studies in Industrial Development.