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Multiple Choice Questions

Which among the following is are tasks of Monetary Policy Committee a Devise policy rate while maint...........

Economic and social issues (RBI) Monetary and fiscal policies

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Which among the following is/are tasks of Monetary Policy Committee?

a) Devise policy rate while maintaining price stability

b) Fixing the benchmark policy rate (repo rate)

c) Containing inflation within the specified target level

d) Devising mechanism for implementing fiscal policy

Only b

Only a, c and d

Only a, b and c

All are correct

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Explanation:

The Monetary Policy Committee is responsible for fixing the benchmark interest rate in India. The meetings of the Monetary Policy Committee are held at least 6 times a year (specifically, at least once BIMONTHLY) 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 31 March 2021 with an upper tolerance of 6% and a lower tolerance of 2%

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