Mumbai, July 27 (IANS) The Reserve Bank of India (RBI) Tuesday said it would update the monetary policy about 45 days after the quarterly review to respond faster to changing domestic and international economic scenarios.
The apex bank said such formal mid-cycle announcements would take out the surprise element emanating from an off-cycle rate decision as was the case earlier.
Although scheduled policy announcements were made once in a quarter, the RBI had intervened at times when situations demanded a policy change.
‘The Reserve Bank will now undertake mid-quarter reviews roughly at the interval of about one and half months after each quarterly review. As per schedule, mid-quarter reviews will be in June, September, December and March,’ RBI Governor D. Subbarao said in the first-quarter review of the central bank’s monetary policy for this fiscal.
In a rapidly evolving macro-economic situation, the RBI said, a gap of a quarter between policy reviews can be too long and many central banks around the world made their policy announcements more frequently, ranging generally from 8 to 12 announcements in a year.
‘Mid-quarter reviews are intended to communicate our assessment of economic conditions more frequently,’ said Subbarao.
The changes or maintenance of the policy rates would be intimated by way of a press release.
‘However, the Reserve Bank will have the flexibility, as always, to take swift and pre-emptive policy action, as and when warranted by the evolving macro-economic developments,’ he said.