What to Watch out for from RBI MPC's upcoming meet
What to Watch out for from RBI MPC's upcoming meet
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CHENNAI:  Economic experts anticipate the RBI Monetary Policy Committee to hike the repo rate by 25-35 basis points with industry lobby body ASSOCHAM also calling for the RBI to do the same. 

It will also be interesting to see whether there will be unanimity amongst the members of the MPC on the decisions taken at the ensuing meeting.

Following the MPC meeting, RBI Governor Shaktikanta Das is anticipated to discuss the letter the bank sent to the federal government outlining the causes of the inflation issue and the efforts being taken to address it.
On November 3, the MPC convened to examine what it would convey to the central government regarding the reasons why it was unable to control inflation.

According to Section 45ZN of the RBI Act, when the central bank misses the inflation target, it must send a report to the central government outlining the reasons why, the corrective actions it proposes to take, and an estimation of the time frame in which the inflation target will be met following prompt implementation of the suggested corrective actions.

Despite the law's prohibition, the abovementioned MPC meeting's proceedings have not been made public. According to section 45ZK, the RBI is required to publish the decision made by the MPC following each meeting.

Also, in accordance with Section 45ZL of the RBI Act, the minutes of every MPC meeting must be published on the 14th day following each meeting. These minutes must include the following: the resolution adopted at the MPC meeting; the vote of each MPC member on resolutions adopted in the said meeting; and each MPC member's statement pursuant to Subsection (11) of Section 45ZL on the resolutions adopted in the said meeting.

The RBI has hiked the repo rate by 190 bps from 4% to 5.90%. Now MPC will take into account the GDP growth estimates, the foodgrain production estimates, inflation projection, global economic activity and other factors.

"The RBI will be presenting the monetary policy against the backdrop of GDP growth slowing down and also inflation being high above 6%," Madan Sabnavis, Chief Economist, Bank of Baroda said.

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