The Reserve Bank of India (RBI) has announced that an
additional meeting of its rate-setting panel, the Monetary Policy Committee
(MPC) for 2022-23 has been scheduled to take place on November 3. The off-cycle
meeting of the RBI MPC comes after the central bank failed its inflation mandate.

“Under the provisions of Section 45ZN of the Reserve Bank
of India (RBI) Act 1934, read along with the Gazette notifications S.O.2215(E)
dated June 27, 2016, and S.O.1422(E) dated March 31, 2021, and the Regulation 7
of the RBI Monetary Policy Committee (MPC) and Monetary Policy Process
Regulation, 2016, an additional meeting of the MPC is being scheduled on
November 3, 2022,” RBI said in a statement.

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This announcement is made according to Section 45ZI(4) of
the RBI Act 1934.

As per the law, RBI must now submit a report to the central
government explaining why it failed to curb inflation, the remedial measures it
proposes to take, and the period within which inflation will return to target.
The MPC is expected to deliberate on the response to the government for failing
to meet the inflation mandate in this meeting.

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The MPC last met on September 28-30, 2022, and was
scheduled to meet for the last time this calendar year on December 5-7, 2022.

In September, the rate-setting panel raised the repo rate
by 50 basis points (bps) to 5.90% over rising inflation concerns. Since May,
the repo rate has increased by 190 bps as inflation remained stubbornly higher.

Inflation has been above the RBI’s quarterly projections in
the bi-annual monetary policy report (MPR) in eight out of the last 10 quarters
until September.

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According to government data released on October 12,
Consumer Price Index (CPI) inflation rose to 7.41% in September, confirming
that average inflation had stayed outside the 2-6% band for three consecutive

The MPC, formed in 2016, is mandated to keep inflation
within 2 percentage points on either side of its 4% target.

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The central bank expects inflation to average 6.7% in the
financial year 2022-23. Thereafter, it expects inflation to decline to 5% in
the April-June quarter of fiscal 2024, closer to its target. RBI governor
Shaktikanta Das had given a two-year timeline for inflation to fall to 4%.

The next review of the RBI MPC is scheduled on December