India's ‘Shambolic' Central Bank Delay Holds Back Recovery
Added 09-28-20 10:04:03pm EST - “(Bloomberg) -- India's government injected more uncertainty into the economy this week, failing to act in time to appoint members to the central bank's panel that decides interest rates.The Reserve Bank of India deferred its three-day…” - Finance.yahoo.com
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(Bloomberg) -- India’s government injected more uncertainty into the economy this week, failing to act in time to appoint members to the central bank’s panel that decides interest rates.
The Reserve Bank of India deferred its three-day interest-rate meeting due to start Tuesday, without giving any reasons or a new date for its policy decision. The six-person Monetary Policy Committee is currently without three external members after their terms expired last month. Rules require at least four MPC members to be present at a meeting.
The government failed to make use of the ample time it had to appoint new MPC members, sowing more confusion into financial markets. The RBI has been doing most of the heavy lifting in providing stimulus to the economy this year, given limited fiscal room available to Prime Minister Narendra Modi’s government.
“This is shambolic,” said A. Prasanna, chief economist at ICICI Securities Primary Dealership Ltd. in Mumbai. “The government and RBI had at least three months time to appoint members and yet they have failed. Monetary policy was the only lever providing support to the economy and such uncertainty doesn’t help.”
MoneyControl website reported the government has selected the new MPC members, but has delayed announcing them until it completes processes like background and security checks. The new MPC could meet as early as next week, the website said, citing a senior government official.
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