Three new external members of the MPC were inducted in October, with two of them already voting for a rate cut in the December policy. There would be more changes in the rate-setting panel, as Deputy Governor Michael Patra, who is in charge of monetary policy, is set to complete his term in mid-January. The government has started the process to appoint his successor. Also, the terms of two other Deputy Governors—T Rabi Sankar and M Rajeshwar Rao—will end, respectively in May and October next year.
The MPC's scheduled review in February will throw some light on the interest rate trajectory. While rates are certain to come down, particularly after the dismal September quarter GDP growth numbers announced last month, questions remain about the timing and the extent of the downward cycle.
Economists, who were expecting a shallow rate cycle of 50 basis points (bps) earlier, now estimate a 100-bp cut after the below par growth numbers.
This story is from the December 30, 2024 edition of Business Standard.
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This story is from the December 30, 2024 edition of Business Standard.
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