Dissent even in the newly constituted MPC

One witnessed dissent even in the newly appointed external members of the monetary policy committee in their first vote to set policy rates though all the internal members unanimously voted for status quo in policy rates

Of the three new external members, Nagesh Kumar Director and Chief Executive of the Institute for Studies in Industrial Development voted for a cut, while the others voted in line with the internal members. “ While views of Nagesh Kumar and Prof Ram Singh on policy were relatively unknown, Saugata Bhattacharya was expected to vote for a cut due to his views in August” said Shreya Sodhani, Regional Economist, Barclays. “ We will await minutes of the meeting to gauge the views of the external members”. Among the external members, while Saugata Bhattacharya has closely worked with the markets when he was the chief economist with the Axis Bank, Kumar and Prof Singh have been respected academics. Notably Kumar’s wellknown research has been in the area of international and foreign trade rather than monetary economics or central banking.

The MPC’s 5:1 vote was for a status quo on policy rates. The Reverve Bank kept the policy rate unchanged at 6.5 percent on Wednesday. “‘ Kumar has voted for a 25bps cut at this policy; suggesting that he is one of the doves on the panel” said Achala Jethmalani, Economist, RBL Bank.


However, the vote on change in stance was unanimous with all the sis members voting for a change in stance from withdrawal of accommodation to neutral.