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Urjit Patel appointment ensures continuity: RBI’s Mundra

Monetary policy is on economic centre-stage, and Patel has been the deputy governor in charge

business Updated: Aug 23, 2016 15:05 IST
RBI,MPC,Monetary Policy Committee
Urjit Patel, deputy governer of RBI and governor designate(Mint)

The appointment of Urjit Patel as the 24th governor of the Reserve Bank will ensure continuity of policy as he has been incharge of the monetary policy, RBI deputy governor SS Mundra said on Tuesday.

“While Patel is new as a governor, he’s not new for RBI. Second thing is, in his present role as deputy governor RBI, he is incharge of monetary policy, which was already the centre-stage of inflation...interest rate-related activity or monetary policy related activity,” he said on the sideline of an event organised by CII here.

“From that perspective, this would be work in progress. So, it would be reasonable to expect that there would a continuity,” he said.

The government on Saturday appointed Patel as the 24th head of the Reserve Bank of India. He will replace Raghuram Rajan, who demits office on September 4.

It is expected that the next monetary policy review, scheduled on October 4, would be undertaken by Monetary Policy Committee rather than the RBI governor.

The MPC was set up by amending the RBI Act, 1934, through the Finance Bill 2016. Under this new system, the RBI governor is ex-officio chairperson of the committee.

Under the agreement with the government, RBI is committed to anchoring retail inflation at 4% (plus/minus 2%) and has set itself a target of 5% to be achieved by next March as part of a ‘glide path’ to achieving the median mark.

Read: Urjit Patel will have just 10 days to finalise RBI’s rate panel

First Published: Aug 23, 2016 15:05 IST