The Reserve Bank of India has called for an additional and out-of-turn monetary policy meeting on the 3rd of November. The meeting will take place under the provisions of Section 45ZN of the RBI Act 1934. This section of the RBI Act pertains to steps to be taken if the Central bank fails to meet its inflation-targeting mandate.
The retail inflation of India surged to 7.41% in last month, remaining above the RBI’s mandated range of 2-6% for the third straight quarter, as the convention would require the central bank to elucidate reasons to the government for not being capable of regulating the increase in price.
The RBI is deemed to have failed in managing price rises under the flexible inflation targeting framework, if the CPI-based inflation is outside the 2-6% range for three quarters in a row.
The Consumer Price Index based inflation escalated to 7.41% in the previous month from 7%, according to the National Statistical Office, Ministry of Statistics and Programme Implementation data released earlier this month. Reserve Bank of India’s next MPC is slated for December 5-7, post out-of-turn meet that will be held in November.