Adding more uncertainty on the economic front, the RBI canceled its three-day monetary policy committee (MPC) meeting scheduled for Tuesday, apparently due to a lack of a quorum. RBI rules require that at least four members be present at the meeting.
But three outside members – Ravindra Dholakia, Pami Dua and Chetan Ghate – of the six-member MPC are retiring on September 30. The government has not yet been able to find replacements for these three members. These external representatives are appointed by the government for a fixed term of four years.
MPC rules do not allow re-election. The upcoming monetary policy review on October 1 was important because the RBI, in addition to deciding on the interest rate, would also likely provide its first economic projections since Covid-19 hit the economy. The RBI gave no reason for the postponement, but this is the first time in recent history that a scheduled review of monetary policy has been postponed.
The central bank had given its last forecast on the economy in February and the RBI Law requires it to publish its forecasts every six months. In the midst of the pandemic, Governor Shaktikanta Das had said then that economic growth will be negative in the current year, but there was no official forecast.
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