RBI calls for additional monetary policy meet to discuss inflation mandate

MUMBAI: The Reserve Bank of India has called for an additional and out-of-turn monetary policy meeting on November 3.

The meeting has been called under the provisions of Section 45ZN of the Reserve Bank of India (RBI) Act 1934, RBI said in a statement on Thursday.

Reportedly, this section of the RBI Act pertains to steps to be taken if the central bank fails to meet its inflation-targeting mandate.

For the record, India’s retail inflation surged to 7.41 per cent in September, remaining above the Reserve Bank of India’s mandated range of 2-6 per cent for the third straight quarter, which according to the convention would require the central bank to explain to the government the reasons for not being able to control the price rise.

Under the flexible inflation targeting framework, the RBI is deemed to have failed in managing price rises if the CPI-based inflation is outside the 2-6 per cent range for three quarters in a row.

As per the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation, data released earlier this month, the Consumer Price Index (CPI) based inflation rose to 7.41 per cent in September from 7 per cent in the previous month.

After November’s out-of-turn meet, RBI’s next MPC is scheduled for December 5-7, 2022.