Home / Industry / Banking /  A look at six MPC members who will decide on interest rates today

The newly-appointed monetary policy committee (MPC) will announce its first bi-monthly policy decision today and all eyes are on this rate-setting committee. While the government recently appointed Ashima Goyal, Jayanth R. Varma and Shashanka Bhide to the MPC, other members include RBI governor Shaktikanta Das, deputy governor Michael Patra and executive director Mridul Saggar. Mint takes a closer look at who they are:

Ashima Goyal

Goyal is a professor of Economics in the Indira Gandhi Institute for Development Research (IGIDR). She is a well-known personality in the policy space and has also been on RBI’s technical advisory committee for monetary policy as well. At present, she is a member of the Prime Minister’s Economic Advisory Council. She is also part of the shadow monetary policy committee constituted by the economic policy think tank EGROW foundation. In a newspaper column in August, Goyal said that the RBI should look through the “current consumer inflation spike due to temporary supply disruptions". Her areas of specialisation include inflation targeting, fiscal and monetary policy, international finance and is seen as dovish in her stance.

Shashanka Bhide

Bhide is a senior advisor, research programmes at the National Council of Applied Economic Research (NCAER). Prior to his current role, he was associated with NCAER from 1982 to 2014 in various roles, after which he became the director of Madras Institute of Development Studies, Chennai until December 2018. His areas of research include agriculture, macroeconomic modelling, infrastructure and poverty analysis. His views on the monetary policy are not yet known and the minutes of the MPC meeting published later will give a clearer indication. For the moment, he is being seen as one with a neutral stance.

Jayanth R. Varma

Varma is a professor of finance and accounting at the Indian Institute of Management (IIM), Ahmedabad and teaches courses in capital markets, fixed income, alternative investments, risk management and corporate finance. He has been present on boards of companies like Axis Bank Ltd, Bharat Petroleum Corp. Ltd, Gujarat International Finance Tec-City Company Ltd, Infosys BPM Ltd and Punjab National Bank. His current research interests are primarily in financial markets including equity, debt, currency and derivative markets. His areas of interest include interest rate transmission, bank capital and foreign exchange risk management, among others. He has written how despite policy rate cuts, lack of transmission has offered little help to the real economy. Varma is being seen as ‘neutral-to-dovish’ in his stance.

Shaktikanta Das

Former bureaucrat Das, who was appointed governor in December 2018 after a somewhat soured relationship between the central bank and the government during Raghuram Rajan and Urjit Patel’s tenure, is known for his dovish stance. During his tenure, the monetary policy committee (MPC) has lowered the repo rate by 250 basis points (bps) to 4%. At the August policy, Das reiterated that monetary policy is geared towards supporting the economic recovery process. While voting for a pause, he said there is headroom for further monetary policy action, at this juncture it is important to keep its arsenal dry and use it judiciously.

Michael Patra

Patra, a career central banker since 1985, has worked in various positions in Reserve Bank of India and is seen as a hawk when it comes to his stance on monetary policy. Before being appointed deputy governor in January this year, he was already a member of the MPC as an executive director. He has worked in the International Monetary Fund as senior adviser to executive director (India) during December 2008 to June 2012, when he actively engaged in the work of the IMF’s executive board through the period of the global financial crisis and the ongoing Euro area sovereign debt crisis. In the August MPC meeting, Patra noted that the outlook is grim and even when it improves, the expectation is one of slow, hesitant recovery, with the situation likely to worsen before it gets better.

Mridul Saggar

Saggar, an executive director at RBI had a stint as chief economist at Kotak Institutional Equities before returning to the central bank. He has varied experience in various fields related to macroeconomics, monetary policy, financial markets, international financial architecture and global financial regulatory reforms, according to his social media page. A recent report by Nomura classified his monetary policy stance as neutral. Last time the MPC met, Saggar said voted for a pause, saying there is sound rationale that monetary policymakers should do less under uncertainty. While pausing, it is best to retain the accommodative stance as long as the baseline suggests that inflation will soften to well within the tolerance band keeping in view the need to avoid frequent directional changes even as policy remains data dependent, he said.

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