Amy Kazmin in New Delhi
The Reserve Bank of India has been forced to postpone its bi-monthly monetary policy committee meeting, which was due to start on Tuesday, after New Delhi failed to appoint replacements for three external committee members whose terms had expired Aug 6.
The delay leaves India’s inflation-targeting monetary policy framework in limbo at a time when it is undergoing a massive economic contraction, and experiencing inflationary pressures, as a result of disruptions from the battle against coronavirus.
Prime Minister Narendra Modi’s government has given no public reason for its failure to fill the vacancies on the MPC, even though it was well known that their four-year terms were expiring.
The RBI said it was rescheduling the meeting, but it did not say when it would be held.
In 2016, India adopted an inflation-targeting monetary policy, after years of battling persistently high inflation. The MPC consists of three members of the RBI, three independent external members, with the RBI governor holding a casting vote.
At its last meeting in August, the MPC held rates steady, and analysts had expected rates to remain unchanged at the scheduled meeting this week.