August 24, 2025

Mumbai shook up this Friday as the Reserve Bank of India (RBI) board gave a big thumbs-up to Indranil Bhattacharyya as the new ex-officio member of the Monetary Policy Committee (MPC). This means he’s now one of the powerful six who decide India’s interest rates! Bhattacharyya replaces Rajiv Ranjan just before the crucial October 2025 policy meet. A proud JNU economics grad, Bhattacharyya brings nearly 30 years of central banking magic. His journey started at RBI in 1996, followed by a spell as an economic expert at Qatar Central Bank from 2009 to 2014, before making a triumphant comeback. Bhattacharyya isn’t just a new face; he’s a thinker. In a 2015 paper, he argued that RBI decisions deeply move financial markets. But that’s not all — he advocates watching bond yields and company borrowing costs closely. "Markets and the RBI influence each other," he said, stressing that keeping financial systems stable is as crucial as fighting inflation. Another bombshell from his earlier research highlighted how markets hit the roof more when RBI tightens policies than when it eases them. Tools like the cash reserve ratio and bank rate shape money flow and interest rates in big ways. Yet, he also warned policy impacts aren’t smooth; different tools hit differently across time. MPC is a powerful six-pack: RBI’s governor Sanjay Malhotra leads, joined by deputy governor M Rajeshwar Rao and new kid on the block Bhattacharyya. External members include economist Saugata Bhattacharya, ISID chief Nagesh Kumar, and Delhi School of Economics director Ram Singh. The RBI board met under Malhotra in Lucknow, dissecting choppy economic waters globally and domestically. They reviewed market moves and institutional gears with top directors and big names such as deputy governors T Rabi Sankar, Swaminathan J, Poonam Gupta, DFS secretary Nagaraju Maddirala, DEA secretary Anuradha Thakur, and industry stars Anand Mahindra and Pankaj Patel. However, the mood was tense. Rising global risks and geopolitics loom large. The RBI estimates a hefty 25% US tariff on Indian exports—like textiles, leather, gems, and seafood—that kicks in from late August. This tariff could slash India’s GDP growth by 20-30 basis points. Energy worries also poured in, especially concerns over Russian oil supply. With Bhattacharyya now in the hot seat, eyes are on how RBI will tweak its policy recipe to steer India through stormy economic seas. Will his sharp insights guide India’s money markets smoothly ahead? The countdown to October’s policy meet has begun!

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Tags: Rbi, Monetary policy committee, Indranil bhattacharyya, Interest rates, Economic policy, Global trade,