The appointment of Urjit Patel as 24th Governor of the Reserve Bank will ensure continuity of policy as he has been incharge of the monetary policy, RBI Deputy Governor S S Mundra said on August 23. “While Patel is new as a Governor, he’s not new for RBI. Second thing is, in his present role as deputy governor RBI, he is incharge of monetary policy, which was already the centre-stage of inflation…interest rate-related activity or Monetary policy related activity,” he said on the sideline of an event organised by CII here.
“From that perspective, this would be work in progress. So, it would be reasonable to expect that there would a continuity,” he said.
The government on August 20 appointed Patel as the 24th head of the Reserve Bank of India. He will replace Raghuram Rajan who demits office on September 4.
It is expected that the next monetary policy review would be undertaken by Monetary Policy Committee rather than RBI Governor. The next bi-monthly RBI policy is scheduled on October 4.
The MPC was set up by amending the RBI Act, 1934, through the Finance Bill 2016. Under this new system, the RBI Governor is ex-officio Chairperson.
Under the agreement with the government, RBI is committed to anchoring retail inflation at 4 per cent (plus/minus 2 per cent) and has set itself a target of 5 per cent by next March as part of a ‘glide path’ to achieving the median mark.