RBI called an emergency meeting of MPC on November 3, may be a big announcement

The Reserve Bank of India (RBI) has called an emergency meeting of the Monetary Policy Committee on November 3. The regular meeting is to be held from 5 to 7 December. It is believed that in this meeting of RBI, if retail inflation remains above 6 percent, the reply to be sent to the government can be discussed. RBI said that a special meeting of the MPC has been scheduled on November 3, 2022 under the provisions of section 45ZN of the Reserve Bank of India (RBI) Act 1934. The RBI's Monetary Committee meeting was last held on September 28 to 30, 2022 and the next meeting is scheduled for December 5 to 7. The MPC had raised the policy repo rate by 50 basis points (bps) to 5.9% on September 30, 2022, making all loans costlier. Experts say that in this meeting, RBI can take tough decisions to control inflation. Once interest rates can be hiked further.

This section of the RBI Act provides that in case of failure to keep inflation within the limits set by the government, the central bank has to report it to the government. The government has given a target to the central bank to limit inflation at four percent (two percent more or less). But despite all efforts, RBI has failed to contain inflation within 6 per cent.

Since January this year, inflation has remained consistently above 6 per cent. Thus the RBI has failed to meet its inflation target for three consecutive quarters. Due to this, he will have to report to the government as per the statutory provisions. RBI has convened this special meeting of the MPC, which takes decisions on monetary policy, for the purpose of preparing this report.