RBI Reschedules Policy Review Meeting

The Reserve Bank of India (RBI) on Monday rescheduled its three-day, bi-monthly review meeting. The RBI's Monetary Policy Committee was originally due to announce a statement on October 1, following a three-day meeting beginning September 29. The dates of the MPC's review meeting will be announced shortly, the central bank said in a statement, without elaborating. The RBI is widely expected to maintain a status quo on key policy rates in its upcoming review, which comes at a time when central banks around the globe are stressing the need for more stimulus to aid economic revival.

Many economists expect the RBI to provide guidance on the economy amid the coronavirus pandemic, for the first time since February. The banking regulator has so far refrained from providing forecasts on growth or inflation due to rise in uncertainty and associated risks of frequent revision in forecasts. The central bank is, however, mandated by law to provide economic forecasts once every six months.

According to 66 respondents in a poll conducted by news agency Reuters, the repo rate is expected to remain unchanged at 4.0 per cent after the upcoming policy review.

A large majority of participants sees no cuts until the January-March quarter, with the RBI likely to stay on hold until the end of 2021.

The terms of three external people on the six-member MPC ended last month, and they are yet to be replaced by the government. The rules of the panel require at least four members to be present at the meeting, with at least one being the governor or the deputy governor, who is a member of the committee.

The central bank must manage high retail inflation while keeping policy accommodative to support an economy which nosedived 23.9 per cent last quarter, the weakest performance on record.

The RBI has so far slashed the rates by 115 basis points in response to the COVID-19 pandemic since late March.