Appointments to the monetary policy committee of the Reserve Bank of India are still pending with less than a fortnight left for the next meeting of the rate setting panel.

Spurred by the jumbo 50basis point cut by the US Federal Reserve, several central banks have started to cut interest rates. The spotlight will soon be focused on the MPC which is due to meet between October 7 and 9 even though most economists expect a rate cut only in December.

The Swiss central bank and the Norway s Riksbank are the latest to cut rates earlier this week, while the Chinese central bank has unfurled a package of measures to kickstart the economy. But for the six-member MPC to meet at all, replacements need to be in place for Jayanth Varma, Ashima Goyal and Shashanka Bhide, whose four-year tenures end on October 4

The time is running out for the Union government, which risks a repeat of the impasse in 2020. The central bank had postponed the MPC s threeday meeting beginning on September 29 as the external members posts were vacant

The Centre will have to make the announcement before October 7, when the MPC meeting will begin. The new external members will be selected by a panel headed by cabinet secretary T.V. Somanathan

The meeting comes not only at the time of a rate-cut- ting cycle in the West but also India s retail inflation falling below the 4-per-cent threshold in August at 3.65 per cent

However, the hawks in MPC are fearful of food inflation and are expected to retain the pause mode on rates, which has been the case since April 2023. MPC had last hiked the policy repo rate by 25 basis points on February 2023

MPC members from the RBI including governor Shaktikanta Das have been pressing for a durable fall in inflation to the mandated target of 4 per cent as a precursor to cutting rates. The outgoing external members had two doves -- JR Varma and Ashima Goyal -- who have been lobbying for a rate cut

The third member, Shashanka Bhide, has voted with the hardliners led by governor Das. "At this juncture it is necessary to maintain the priority on achieving inflation target objectives," he was quoted in the minutes of the last MPC meet in August

Separately, a Reuters poll of economists revealed that the majority expect a 50 basis point cut over the next six months with the earliest possible decision expected only in December

Most economists said the RBI would not be led to follow up quickly after the US Federal Reserve s 50 basis-point cut this month, thanks to a strong domestic economy and a stable currency

Over 80 per cent of economists, 63 of 76, in a September 17-26 Reuters poll predicted the RBI would hold the repo rate at 6.50 per cent at the conclusion of its October meeting. Twelve forecast a 25 basis-point cut, while one anticipated a drop to 6.15 per cent

The RBI has held the repo rate steady since February 2023, focusing on maintaining a tight trading range for the rupee through direct interven- tion in the forex market. "The reason why the RBI will not be in a hurry, unlike the Fed who had to go for a cut, is because the Indian economy is still on a very strong wicket," said Suman Chowdhury, economist at Acuite Ratings

"With...food inflation showing signs of coming down and for the next few months likely to behave better compared to last year, I see the likelihood of the cut in December," he added

Governor Shaktikanta Das reiterated recently that it was important to "not get carried away by some dips in inflation," leading several to conclude it would take a few more readings of benign inflation to give the RBI enough confidence to cut rates

With input from Reuters