The Reserve Bank of India (RBI) has announced the Monetary Policy Committee (MPC) will hold an additional meeting on November 3.
The six-member Monetary Policy Committee headed by RBI Governor Shaktikanta Das will prepare the report on reasons for the failure to meet the inflation target as well as the remedial measures the central bank is taking to bring down prices in the country.
"Under the provisions of Section 45ZN of the Reserve Bank of India (RBI) Act 1934... an additional meeting of the MPC is being scheduled on November 3, 2022," RBI said in a statement on Thursday.
Section 45ZN of RBI Act deals with failure to maintain the inflation target.
The MPC was slated to meet for the last time this calendar year on December 5 - 7, 2022.
The RBI's MPC, after its meeting on September 30, had hiked repo rate by 50 basis points to 5.90 per cent.
Inflation has been above the RBI's quarterly projections in the bi-annual monetary policy report (MPR) in eight out of the last 10 quarters until September, while retail price rise exceeded the 4%-6% mandated target band since January.
RBI Act mandates that in case the inflation target is not met for three consecutive quarters, the central bank has to submit a report to the government explaining the reasons and detail the remedial actions it will be taking to check the price rise.
This will be the first time since the monetary policy framework came into effect in 2016 that RBI will have to explain its actions to the government.
The central bank is required to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
The retail inflation based on CPI has remained above 6 per cent since January 2022. It was 7.41 per cent in September. The MPC factors in retail inflation while deciding the bi-monthly monetary policy.
RBI has been aggressively raising the key interest rate since May in a bid to contain inflation. It has so far raised the short term lending rate by 190 basis points taking the rate to a nearly three-year high of 5.9 per cent.