scorecardresearchWhat transpired at RBI's MPC meet held to discuss inflation mandate failure?

What transpired at RBI's MPC meet held to discuss inflation mandate failure?

Updated: 04 Nov 2022, 09:52 AM IST
TL;DR.

The meeting was called on Thursday under Section 45ZN of the Reserve Bank of India (RBI) Act 1934, which pertains to steps to be taken if the central bank fails to meet its inflation-targeting mandate.

RBI data showed bank credit registered a growth of 8.7 percent year-on-year (YoY) as of 11 March.

RBI data showed bank credit registered a growth of 8.7 percent year-on-year (YoY) as of 11 March.

(ANI) An out-of-turn meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India was held to discuss and draft the report to be sent to the central government for having failed in maintaining the inflation mandate.

The meeting was called on Thursday under Section 45ZN of the Reserve Bank of India (RBI) Act 1934, which pertains to steps to be taken if the central bank fails to meet its inflation-targeting mandate.

The meeting was chaired by RBI Governor Shaktikanta Das and attended by all MPC members -- Michael Debabrata Patra, Rajiv Ranjan, Shashanka Bhide, Ashima Goyal, and Prof Jayanth R. Varma.

Under the flexible inflation targeting framework introduced in 2016, the RBI is deemed to have failed in managing price rises if the CPI-based inflation is outside the 2-6 percent range for three quarters in a row.

For the record, India's retail inflation surged to 7.41 percent in September, remaining above the mandated range of 2-6 percent for the third consecutive quarter.

Further details about the special meeting are not in the public domain. 

First Published: 04 Nov 2022, 09:45 AM IST