RBI MPC meeting starts with new members: Here is what to expect

The Reserve Bank of India’s newly-constituted Monetary Policy Committee (MPC) started its three-day deliberations on Wednesday, after suddenly postponing the meet last week. On September 28, the RBI had postponed the meeting of the Monetary Policy Committee (MPC) as three new members of the committee were yet to be appointed. Within a day of the government appointing three independent members of the MPC, the Reserve Bank announced that the rate-setting panel will meet from October 7 to 9 for the bi-monthly review of the monetary policy. 

"... The next meeting of the Monetary Policy Committee (MPC) is scheduled during October 7 to October 9, 2020," the Reserve Bank said in a statement. 

The government has appointed three eminent economists Ashima Goyal, Jayanth R Varma and Shashanka Bhide as members of the MPC. The new members replace Chetan Ghate, Pami Dua, and Ravindra Dholakia. They were appointed on the panel for four years on September 29, 2016.  

WATCH Tech Talks EP 33 on Paytm Mini App Store:

Experts, including bankers, are of the opinion that the Reserve Bank is likely to maintain status quo and keep interest rates unchanged this time in view of rising retail inflation driven mainly by supply side issues. RBI Governor Shaktikanta Das had earlier said although there was headroom for further monetary policy action, it was important to keep "our arsenal dry and use it judiciously." 

“Residential sales across cities are gradually reviving with the lockdown being lifted. We are optimistic that the upcoming festive season will trigger the home buying sentiment in the market as big-ticket purchases are planned around auspicious times. Given that the festive season is on, which is going to extend all the way up to December, it is also important that the interest rates are reduced drastically which will enthuse the home loan borrowers,” Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani. 

He added that any further cut in policy rates would definitely push the home buyers to firm up their buying decisions who were waiting for the perfect opportunity to invest in their dream home.  

“We are also hoping that the government will chart out fresh stimulus in terms of bold fiscal measures for the real estate sector in the near future to outperform its growth traction. Being one of the major contributors to the economy of the country, the benefits provided to the sector will have a positive impact on the overall growth of the nation,” he said. 

The last meeting of the panel was held during August 4 to 6, 2020. It was the 24th meeting of the rate-setting panel since it met for the first time in October 2016.