The Reserve Bank of India (RBI) on Monday said that its Monetary Policy Committee (MPC) will release its sixth bi-monthly policy statement on February 7 at 11:45 am instead of 2:30 pm, as has been the norm for over two years.
"The Monetary Policy Committee (MPC) will meet during February 5 to 7, 2019 for the sixth bi-monthly Monetary Policy Statement for 2018-19. The resolution of the MPC will be placed on the website at 11.45 AM on February 7, 2019," the RBI said in a statement on its website.
The central bank did not elaborate on the reason for the change. Notably, RBI used to unveil the monetary policy at 11 am under former governor Raghuram Rajan. It was only in September 2016, just ahead of then Governor Urjit Patel's first policy review, that the RBI decided to change the timing of announcement to mid afternoon.
Meanwhile, with Budget 2019 done and dusted, all eyes now rest on the central bank as to how it will react on Budget announcements in its policy review. Analysts believe the government fixing the higher fiscal deficit target at 3.4 per cent for fiscal year 2018-19 and FY20 and increasing the FY19 gross market borrowing to Rs 7.1 lakh crore--much higher than market expectations of Rs 6.5 lakh crore--means there is an upside risk to the inflation. This will nudge the RBI to stay cautious on the inflation trajectory even as the inflation has undershot RBI's projections consistently. The consumer price index (CPI)-based inflation hit an 18-month low of 2.19 per cent in December. It has been ruling below 4 per cent since August last year.
"We believe the RBI to be cognisant of the risk to inflation from fiscal slippage, and we continue to expect it to keep rates on hold in the upcoming policy review on 7 February. That said, we expect a change in its policy stance from 'calibrated tightening' to 'neutral'."
This would be the first MPC meeting under RBI Governor Shaktikanta Das, who took charge in December 2018 following sudden exit of Urjit Patel.Interim Finance Minister Piyush Goyal is scheduled to address customary post Budget meeting with RBI board on February 9 to highlight the key points of interim Budget.