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With reference to the Monetary Policy Committee, consider the following statements:
1. The Monetary Policy Committee (MPC) of the Reserve Bank of India recently increased the repo rate by 35 basis points (bps) to 6.25%.
2. Standing Deposit Facility stands also raised to 6%.
Which of the statements given above is/are correct?
  • a)
    1 only
  • b)
    2 only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
With reference to the Monetary Policy Committee, consider the followin...
The Monetary Policy Committee (MPC) of the Reserve Bank of India recently increased the repo rate by 35 basis points (bps) to 6.25%, and the Standing Deposit Facility stands raised to 6%.
  • Since May, the board has now increased the key rate by 225 bps in FY23.
    • A 100 basis points equal one percentage point.
  • Retail price inflation in India reduced to 6.77 percent YoY in October 2022 from a five-month high of 7.41 percent in September, 2022.
  • However, the fact that it continued to be above the central bank's acceptable limit of 2 to 6 percent for a tenth consecutive period prompted RBI to raise the repo rate for the fifth time.
  • Inflation is expected to be 6.7% this year, with CPI inflation for the first quarter of 2023-24 projected at 5% and the second quarter at 5.4% on the assumption of a normal monsoon.
  • The central bank’s key committee also marginally lowered the GDP projection to 6.8% for 2022-23, with the third quarter registering 4.4% growth.
  • The rupee has appreciated by 3.2% in real terms even as several other currencies have dropped.
Monetary Policy Committee
  • The Monetary Policy Committee of India is responsible for fixing the policy interest rate, to achieve the objectives of monetary policy.
Composition:
  • Three officials of the Reserve Bank of India, with Governor of RBI as Chairperson, ex officio
  • Three external members appointed by the Government of India
  • The external members hold office for a period of four years.
  • Decisions of the MPC are taken on the basis of majority, with Governor having the casting vote in case of a tie.
  • The MPC meets least 4 times a year and it publishes its decisions after each such meeting.
Hence both statements are correct.
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With reference to the Monetary Policy Committee, consider the following statements:1. The Monetary Policy Committee (MPC) of the Reserve Bank of India recently increased the repo rate by 35 basis points (bps) to 6.25%.2. Standing Deposit Facility stands also raised to 6%.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
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With reference to the Monetary Policy Committee, consider the following statements:1. The Monetary Policy Committee (MPC) of the Reserve Bank of India recently increased the repo rate by 35 basis points (bps) to 6.25%.2. Standing Deposit Facility stands also raised to 6%.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to the Monetary Policy Committee, consider the following statements:1. The Monetary Policy Committee (MPC) of the Reserve Bank of India recently increased the repo rate by 35 basis points (bps) to 6.25%.2. Standing Deposit Facility stands also raised to 6%.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the Monetary Policy Committee, consider the following statements:1. The Monetary Policy Committee (MPC) of the Reserve Bank of India recently increased the repo rate by 35 basis points (bps) to 6.25%.2. Standing Deposit Facility stands also raised to 6%.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
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