New Delhi. The Reserve Bank of India has called an emergency meeting of the Monetary Review Policy on November 3. Earlier, when the monetary policy committee had an emergency meeting, it was decided to increase the policy interest rates. It is believed that in this meeting, the central bank will decide the future strategy and will consider what answer should be given to the central government if the inflation rate is not kept within the prescribed limit. Significantly, for the last three quarters i.e. for nine months, the inflation rate has been above the maximum limit of six per cent.
However, in a statement issued by the Reserve Bank of India, it has been said that this special additional meeting of the Monetary Policy Committee has been called under Section 45 JN of the RBI Act. If the RBI is not able to keep the inflation rate below 6 per cent, then it has to submit a report to the central government under this legal provision as to why it did not happen. At the same time, it is also to be told that what is the necessary step she is going to take to fulfill it and by when will she be able to complete this target.
It is worth noting that the government has given a target to the central bank to limit inflation at 4 per cent. In this, an upper and lower limit of two percent has been fixed. But despite all the efforts, the RBI has failed to keep the costly within six per cent. Since January this year, the inflation rate has remained consistently above 6 per cent. Thus, the RBI has failed to meet its inflation target for three consecutive quarters, so it will have to report to the government as per statutory provisions.
RBI has convened this special meeting of the monetary policy decision-making committee for the purpose of preparing this report. According to the recommendations of the committee, the policy repo rate has been increased by 1.90 percent since May. In this way, the repo rate has now reached 5.90 percent. Despite this, the inflation rate has remained above 6 per cent for three consecutive quarters. In September, the inflation rate rose to 7.41%.
