M Patra pushed for rate hike at RBI's monetary policy review meet
M Patra pushed for rate hike at RBI's monetary policy review meet: But minutes of meeting show executive director voting for status quo...
There is nothing unnatural in expressing one's view on an issue in such forums and later falling in line with a position which, in balance, seems comfortable, at the voting stage. Such media analysis can result in reducing transparency in deliberations.
My response:
My VIEW:
There is nothing unnatural in expressing one's view on an issue in such forums and later falling in line with a position which, in balance, seems comfortable, at the voting stage. Such media analysis can result in reducing transparency in deliberations.
AND
My response:
MPC proceedings
This
refers to Abhijit Lele’s story “Patra
pushed for rate hike at RBI meet” (Business Standard, April 21). While the text of the
report is a balanced one the caption read with the note “But minutes of the
meeting show executive director voting for status quo” gives an impression that
Michael Patra has done something unusual or
‘acted under duress’, which is not the case.
Patra
concludes his statement asunder:
“To
sum up, I believe that a pre-emptive 25 basis points increase in the policy
rate now will point us better at the target of 4 per cent to which the
Committee has committed explicitly. It will also obviate the need for
back-loaded policy action later when inflation is unacceptably high and
entrenched. On balance, however, I vote for holding the policy rate unchanged
in this bi-monthly meeting and await a few more readings of incoming data so
that remaining transitory factors have passed and a clearer assessment of
domestic and global macroeconomic conditions emerges.”
Since
the present Monetary Policy Committee became functional, it meets for two days
and RBI Governor announces the Bimonthly Monetary policy based on the
recommendation of the MPC on the second day. The deliberations of MPC are
transparent to the extent that views expressed by each member including
Governor are made public.
I
think, voting by a member and the views expressed by him at the meeting should
be seen separately, as voting could be influenced by the strength of argument put
forth by other members also. MPC should be given some more time to evolve its
own procedures and practices without affecting the free and fair expression of
views by each member during the meetings.
M
G Warrier, Mumbai
M G Warrier
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