MPC panel to get a new face: Rajiv Ranjan likely to replace Mridul Saggar

Rajiv Ranjan likely to replace Mridul Saggar in rate-setting panel

The Reserve Bank of India’s (RBI’s) rate-setting panel — Monetary Policy Committee (MPC) — is set to get a new member. Internal mem­ber Mridul Saggar will be retiring by the end of the mo­nth. Saggar is one of the exe­cutive directors of the RBI.

His portfolios include the Department of Econo­mic and Policy Research and the Monetary Policy Department (MPD).

Chief General Manager Sitikantha Pattanaik and MPD Advisor-in-Charge Rajiv Ranjan have already been empanelled as executive directors. While both are in contention for the MPC seat, sources said it is likely that Ranjan will be making it to the panel. Ranjan has a Master’s degree from the Delhi School of Economics and a PhD from Mumbai University.

Of the six MPC members, three are external members. The other three members are the RBI governor who is the chairperson of the committee, deputy governor in charge of the monetary policy, and one officer of the RBI nominated by the central board. Typically, the executive director of the MPD becomes the third internal member.

Saggar became executive director in July 2020 after Janak Raj retired. Raj was also an executive director in charge of MPD and a member of the MPC.

The next review of the MPC is scheduled in June and the new member will be part of the meeting. The new member joins at a time when there is expectation of sharp interest-rate hikes. The MPC has maintained status quo on interest rate in the last 11 meetings, while keeping the policy stance ultra-loose to revive growth crimped due to the Covid-19 pandemic.

However, things have changed since late February after Russia invaded Ukraine. Geopolitical tensions have ballooned commodity prices, with crude oil crossing the $100 per barrel mark for the first time since 2014.

As a result, the tone of the MPC in the April meeting turned hawkish and there is a likelihood that the repo rate will be hiked 4-6x in the course of a year.