In a clear departure from precedents, the fourth bi-monthly RBI monetary policy event was less action-packed, with the duration of the new governor’s first interaction with the media getting abruptly curtailed halfway into the meeting.
Policy announcements customarily started at 11 am, but governor Urjit Patel changed this to 2.30 in the afternoon, bringing it in line with central banks worldwide.
“We did a scan of central banks (globally) and what we have introduced this mid-afternoon policy decision today, in terms of timing, is broadly the norm elsewhere… the change in time has been necessitated not to make things harder but due to the process and time logistics which is entailed in the committee decisions making mode that we are now in,” Patel explained.
His predecessor Raghuram Rajan had stuck to the morning schedule while interactions with the media and subsequently with analysts and researchers was done over an extended period.
On Tuesday, the six-member Monetary Policy Committee (MPC) announced its first monetary policy with a unanimous vote in favour of a repo rate cut of 0.25% to 6.25%. Repo rate is a rate at which banks borrow from RBI to fund their short-term requirements to lend money to borrowers.
Patel, who chaired the MPC, said, “We have been meeting over the last day and-a-half going through presentations, discussions, drafting and coming to conclusions over policy repo rate… Our discussions were frank, often intense but always friendly. We allowed each other to speak and ensured there is no rancour and at the end of the day we agreed on an MPC decision for the country.”
{{/usCountry}}Patel, who chaired the MPC, said, “We have been meeting over the last day and-a-half going through presentations, discussions, drafting and coming to conclusions over policy repo rate… Our discussions were frank, often intense but always friendly. We allowed each other to speak and ensured there is no rancour and at the end of the day we agreed on an MPC decision for the country.”
{{/usCountry}}Less flamboyant and not throwing away one-liner quotes like Rajan, Patel was however clear in his assessment of the core issues – bank NPAs and global trade.
Patel said larger investment in roads and railways will improve infrastructure, ease of doing business, proactive food management will play crucial role, improvement in pulses supply has been the main contributor and there is sharp improvement in competitiveness ranking.
Read: RBI cuts interest rate, raises hopes of cheaper home loans, EMIs