India’s central bank delays MPC meeting as posts lie vacant

Bloomberg

The Reserve Bank of India rescheduled this week’s interest-rate meeting over the possible lack of a quorum in the Monetary Policy Committee (MPC).
“The dates of the MPC’s meeting will be announced shortly,” the RBI said in a statement on Monday, without giving reasons for the delay.
The meeting was scheduled to begin on Tuesday, with the rate decision expected to be announced on Thursday.
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, in his absence, the deputy governor, who is a member of the committee.
“The government and RBI had at least three months-time to appoint members and yet they have failed,” said A. Prasanna, chief economist at ICICI Securities Primary Dealership Ltd. in Mumbai. “This is shambolic. Monetary policy was the only lever providing support to the economy and such uncertainty doesn’t help.”
The MPC, which came into being in 2016, has lowered interest rates by 115 basis points so far this year and retained its accommodative monetary policy stance to support the economy. Policy makers were widely expected to keep rates on hold at this week’s meeting, according to economists surveyed by Bloomberg.
The panel’s inflation-targeting mechanism is also due for review by next year.
Set in 2016, it requires the RBI to keep inflation at the 4% midpoint of a 2%-6% range.