Reserve Bank Governor Urjit Patel and five other experts on the MPC will take a call on changing interest rate in the backdrop of declining retail interest rate when they meet on April 4-5 to decide the first bi-monthly monetary policy of the next fiscal.
The Reserve Bank, which has been tasked to restrict inflation at 4 per cent (plus/minus 2 per cent), has retained the key short term lending rate (repo) at 6 per cent in its last three bi-monthly policy reviews citing inflationary concerns.
“…the Monetary Policy Committee will meet six times during 2018-19,” the RBI said while releasing the calender of bi-monthly meetings for 2018-19. The first meeting is scheduled on April 4 and 5 and the last of the fiscal on February 5 and 6.
The policy statement will be issued in the afternoon of April 5. As per the Reserve Bank of India Act, 1934, the central bank should organise at least four meetings of the Monetary Policy Committee in a year.
The meeting schedule of the MPC for a year should also be published at least one week before the first meeting in that year.
The retail inflation based on the Consumer Price Index (CPI), which the RBI factors in while arriving at policy rate, fell to a 4-month low of 4.44 per cent in February on cheaper food articles and lower cost for fuel. It was at 5.07 per cent in January, though in February 2017 CPI was 3.65 per cent.
Industry wants that RBI should reduce the interest rate to give a boost to the Index of Industrial Production (IIP) which has started moving northwards.
It has also been argued that the RBI can take bold steps as both retail and wholesale inflation is on downside.
Patel headed MPC has two other representatives from RBI — Deputy Governor Viral Acharya, Executive Director Michael Debabrata Patra. There are three external members — Chetan Ghate, Pami Dua and Ravindra Dholakia.