Poonam Gupta Named RBI Deputy Governor Before April MPC
Why in the news
Poonam Gupta joined RBI as Deputy Governor, probably heading the monetary policy department, just before the April 7-9 MPC meeting.
Key facts
- RBI officials were to meet bankers on April 4 on the liquidity framework.
- Liquidity shifted from deficit to small surplus.
- Infusions so far: ₹5 trillion through bond purchases and ₹1.8 trillion via repos.
Concerns
- After the February repo cut, pass-through to MCLR corporate loans and deposit rates is weak.
- Only EBLR-linked retail and small-business loans became cheaper.
Inflation-targeting debate
| Issue | Point |
|---|---|
| Core vs headline | Some want core inflation targeted, as food prices make headline volatile |
| 2024 paper | Gupta with Barry Eichengreen: avoid drastic framework changes |
| CPI basket | Food weight from 45.8% to about 40%; 30% in a decade |
Exam angle
- Watch points: a cut above 25 bps, and a stance shift from neutral to accommodative.
- Current CPI food weight: 45.8%.