Monetary Policy Committee decided to keep the Policy Repo rate under the liquidity adjustment facility (LAF) unchanged to 6.5%

Monetary Policy Committee of India (MPC)- 

The Monetary Policy Committee of India is a committee of the Reserve Bank of India that is responsible for fixing the benchmark interest rate in India.

Meeting of MPC – The meetings of the Monetary Policy Committee are held at least 4 times a year and it publishes its decisions after each such meeting.

The committee comprises six members –

Three officials of the Reserve Bank of India and three external members nominated by the Government of India. They need to observe a “silent period” seven days before and after the rate decision for “utmost confidentiality”. The Governor of Reserve Bank of India is the chairperson ex officio of the committee. Decisions are taken by majority with the Governor having the casting vote in case of a tie. The current mandate of the committee is to maintain 4% annual inflation until March 31, 2021 with an upper tolerance of 6% and a lower tolerance of 2%.

The committee was created in 2016 to bring transparency and accountability in fixing India’s Monetary Policy.The monetary policy are published after every meeting with each member explaining his opinions. The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months. 

Press Statement on Fourth Bi-monthly Monetary Policy Statement, 2018-19 Resolution of the Monetary Policy Committee (MPC) Reserve Bank of India –

 

Meeting Minutes of The Monetary Policy Committee (MPC) –

In its fourth bi-monthly statement, issued on 05.10.2018, on the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5 per cent.

The GDP growth projection for 2018-19 is retained at 7.4 per cent as in the August resolution. The projections of inflation for 2018-19 and Q1:2019-20 have been revised downwards from the August resolution.

The decision of the MPC is in consonance with the Government’s assessment of inflation and growth going forward and for achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent., while supporting growth.

The Government welcomes the MPC’s assessment and notes its decision to maintain the Policy Rate.

(Source – Press Information Bureau, Ministry of Finance, Government of India – 05 OCT 2018 4:38PM by PIB Delhi)

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