Reserve Bank of India (RBI) Governor Shaktikanta Das remained tight-lipped on whether his term as the head of the central bank would be extended, during the Monetary Policy Committee (MPC) press conference on Friday.
“I am not giving you any headlines,” Das said when asked about his possible extension.
Speculation has been growing that the central government may extend Das’s term for a third time, a decision that would make him the longest-serving RBI Governor since the 1960s. His current term ends on December 10, 2023.
Das to become longest-serving RBI guv?
Das, who was appointed as the RBI Governor in December 2018, has already surpassed the typical five-year tenure that has been standard in recent decades. If extended, he would surpass the tenure of Benegal Rama Rau, who held the role for 7.5 years from 1949 to 1957. Prior to his appointment at the RBI, Das was a key official in Prime Minister Narendra Modi’s administration and played a critical role during a period marked by strained relations between the government and the central bank.
Two government sources familiar with the matter told Reuters that no selection committee has been formed and no other candidates are under consideration at this time. According to the sources, Das’s term is likely to be extended for at least another year.
The government is yet to make an official announcement on this matter.
Key RBI MPC decisions today
The RBI-led MPC decided to keep the policy rate unchanged for the 11th time in a row but sharply lowered the GDP growth forecast to 6.6% for the current fiscal, as against earlier projection of 7.2% . The Reserve Bank of India (RBI) maintained the status quo on interest rate despite July-September quarter GDP growth falling to 7-quarter low of 5.4% , as against its own projection of 7% .The rate increase cycle was paused in April last year after six consecutive rate hikes, aggregating to 250 basis points since May 2022.
Announcing the fifth bi-monthly monetary policy for the current financial year, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5 % while keeping policy stance unchanged at neutral.
He said MPC will remain watchful of incoming macroeconomic data for future action.
The RBI sharply cut the GDP growth projection to 6.6% from the earlier level of 7.2% , while raising inflation target to 4.8 % from the previous projection of 4.5% for the current fiscal.
In a bid to make available more money with banks for lending so as to boost economic activity, the RBI slashed Cash Reserve Ratio to 4% from existing 4.5% . This would lead to release of Rs 1.16 lakh crore to banks and improve their lending capacity.
The CRR is the percentage of a bank’s total deposits that it is required to maintain in liquid cash with the RBI. The CRR percentage is determined by the RBI from time to time. Banks do not get any interest on this amount.
