Context-The Monetary Policy Committee (MPC) decided to keep the interest rates unchanged in the wake of a rise in inflation.

• This is the second policy review meeting where the rates have been kept unchanged.
• The rates also remained unchanged in the last meeting which was held in December 2019.
• The RBI last reduced the rates by 135 basis points (bps) between February and October 2019.
• The RBI has decided to keep the interest rates unchanged in the wake of a rise in inflation.

Monetary Policy Committee (MPC):

• MPC is a six-member committee constituted by the Central Government
•  Section 45ZB of the amended RBI Act, 1934
• Once in every six months, the Reserve Bank is required to publish a document called the Monetary Policy Report to explain: (1) the sources of inflation and(2) the forecast of inflation for 6-18 months ahead.
• The committee comprises six members – three officials of the Reserve Bank of India and three external members nominated by the Government of India.
• The Governor of Reserve Bank of India is the chairperson ex officio of the committee.

REPO Rate:

• REPO denotes Re Purchase Option – the rate by which RBI gives loans to other banks. In other words, it is the rate at which banks buy back the securities they keep with the RBI at a later period.