RBI has not indicated the subject of the statement.
The yield on 10-year benchmark bond spiked 9 bps to touch 7.2% after the news.
The last time such an unscheduled statement was made by Governor Shaktikanta Das was during the peak of the first wave of the coronavirus (Covid-19) pandemic in May. In May, RBI called an unscheduled meeting of the Monetary Policy Committee (MPC) – the rate setting body – and announced a 40 bps cut in the repo rate. In March 2020 also – just after a nationwide lockdown was announced to curb the spread of the Covid-19 pandemic – the central bank pre-poned the policy review meeting ( which was scheduled for April) and announced a 75 bps rate cut.
On Monday, the central board of the RBI approved the nomination of Rajiv Ranjan as a member of the MPC. Ranjan replaced Mridul Saggar who retired on April 30. Ranjan is the third internal member (ex-officio) of the MPC. The next monetary policy meeting is scheduled for June 6-8.
In the last policy meeting, in April, the MPC shifted its focus to tackle inflation after the Russian invasion of Ukraine led to a surge in commodity prices including crude oil. The central bank also revised its inflation projection sharply and cut growth estimates.
The MPC said the focus would be on "withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth". Though RBI said it had decided to remain ‘accommodative’, the word stance was dropped from the resolution. Annual inflation rate in India increased to 6.95 per cent in March 2022, the highest since October 2020, and above the market forecasts of 6.35 per cent.
In an interview to Business Standard after the April meeting, MPC member Jayanth Varma said markets should prepare for action, which could be in either direction — it could be to support growth, or to address inflation — as these are uncertain times.
The governor's statement today comes amid the US Federal Reserve’s two day meeting which is currently underway. It is widely expected that the US Fed will hike interest rates by 30 bps.