The government has appointed Michael Debabrata Patra, considered as a monetary policy hawk, the Deputy Governor of the Reserve Bank of India (RBI).
Patra, who is currently looking after the Monetary Policy Department as the Executive Director, has been appointed to the post for three years.
The post was lying vacant after Viral V Acharya resigned in June 2019. Patra is likely to retain the Monetary Policy Department, which was handled by Acharya, as the Deputy Governor. Before Acharya, Urjit Patel who later became the Governor was looking after this crucial department as Deputy Governor. The RBI, headed by Governor Shaktikanta Das, can have a maximum of four deputy governors. N S Vishwanathan, B P Kanungo and M K Jain are the other Deputy Governors working of the central bank.
Patra, who joined the central bank in 1985, is currently a member of the Monetary Policy Committee (MPC) — which sets the benchmark rates — as the ED of the Monetary Policy Department. Patra has played a key role in the RBI’s views on the macro-economy, the new inflation targeting framework and the liquidity framework.
The immediate challenge for Patra will be to balance the emerging growth-inflation dynamics. The consumer price index (CPI) continued to breach the RBI’s medium-term target of 4 per cent for third consecutive month in December 2019 at 7.35 per cent, which is the highest since July 2014. The spike in retail inflation is attributed to high food prices. Food inflation rose to 14.12 per cent in December as against (-) 2.65 per cent in 2018. It was 10.01 per cent in November 2019.