Surprise Dissenter Emerges in RBI’s Monetary Policy Team

In a recent shake-up of the Reserve Bank of India’s (RBI) monetary policy committee (MPC), Nagesh Kumar, one of the three newly appointed external members, stood out as a new voice of dissent, advocating for a rate cut. The RBI appointed Nagesh Kumar, Ram Singh, and Saugata Bhattacharya on October 1 to replace outgoing members Ashima Goyal, Jayanth Varma, and Shashanka Bhide, whose terms ended just before the MPC’s meeting on October 9.

During the latest MPC meeting, the committee unanimously decided to shift its policy stance from “withdrawal of accommodation” to a “neutral” focus on growth. However, there was disagreement on maintaining the 6.5% repo rate, with Kumar favoring a cut.

In previous meetings, outgoing members Goyal and Varma had voiced dissent against keeping rates unchanged, calling for more dovish policies. With the new appointments, economists speculated that the balance of opinions within the committee would shift, potentially opening the door for future rate cuts.

Despite this reshuffle, the committee ultimately decided to keep the repo rate steady, although Nagesh Kumar’s stance signaled potential changes in future discussions.