Ahead of next week’s rate decision, three new external members of the monetary policy committee (MPC) have been announced. Ram Singh, Delhi School of Economics Director, economist Saugata Bhattacharya and Nagesh Kumar, director and head of Institute for Studies in Industrial Development (ISID) will be three new members appointed for a term of four years, as the term of the current three ends this week. Other members of the MPC are RBI representatives, including Governor Das. Ram Singh has authored papers in the areas of infrastructure management, intricacies of land acquisition, public-private partnerships in infra, climate change, amongst others, reflecting a focus towards improving the economy’s manufacturing capacity, and developmental economics. Saugata Bhattacharya, who has worked for domestic financial institutions, was also a part of the RBI’s Working Group on Monetary Policy and the Finance Ministry Group on Estimating Foreign Savings. In previous commentaries, he had highlighted the need to monitor the US Federal Reserve, expecting the RBI to stay hawkish until inflation returned to the target. Nagesh Kumar has worked in the field of industrial development, with his areas of research including FDI and international trade, regional integration, and sustainable development. The varied background of the three members will provide a good mix of perspectives on domestic and global developments. Official leaning of the new members is likely to be gleaned from the commentary during the rate decision as well as subsequent minutes of the policy meeting. Terms of another two RBI MPC members including the Governor, ends between December and mid-January.
For India, the US Fed’s decision is a necessary but not sufficient condition for the RBI monetary policy committee to shift expeditiously to a dovish gear. Domestic conditions, primarily the inflation path, besides currency movements and growth impulse, should also warrant a pivot. Moderation in the July-August CPI inflation was on the back of an exceptionally favourable base effect, with stickiness in food inflation in fact offsetting a deeper pullback in the headline print. The central bank’s resolve in addressing food price inflation and preventing an un-anchoring in inflationary expectations is likely to see the MPC members lean towards a pause in October, with a softening in stance towards the December rate review. Geopolitics also warrant attention after the overnight escalation in tensions between Iran and Israel.
Topic
Explore more
E & S Macro StrategyGENERAL DISCLOSURE/ DISCLAIMER (For Macroeconomics, Currencies, Interest Rates)
The information herein is published by DBS Bank Ltd and/or DBS Bank (Hong Kong) Limited (each and/or collectively, the “Company”). It is based on information obtained from sources believed to be reliable, but the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. The Company, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Company and its associates, their directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking or financial services for these companies. The information herein is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction (including but not limited to citizens or residents of the United States of America) where such distribution, publication, availability or use would be contrary to law or regulation. The information is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction (including but not limited to the United States of America) where such an offer or solicitation would be contrary to law or regulation.
[#for Distribution in Singapore] This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) which is Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 65-6878-8888 for matters arising from, or in connection with the report.
DBS Bank Ltd., 12 Marina Boulevard, Marina Bay Financial Centre Tower 3, Singapore 018982. Tel: 65-6878-8888. Company Registration No. 196800306E.
DBS Bank Ltd., Hong Kong Branch, a company incorporated in Singapore with limited liability. 18th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
DBS Bank (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability. 11th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
Virtual currencies are highly speculative digital "virtual commodities", and are not currencies. It is not a financial product approved by the Taiwan Financial Supervisory Commission, and the safeguards of the existing investor protection regime does not apply. The prices of virtual currencies may fluctuate greatly, and the investment risk is high. Before engaging in such transactions, the investor should carefully assess the risks, and seek its own independent advice.