Consider the following statements regarding Monetary Policy Committee MPC in India 1 India is the on...........

Economic Affairs Money Supply and Monetary Policy

Consider the following statements regarding Monetary Policy Committee (MPC) in India.

1. India is the only country in the World to have a MPC framework.

2. Both the RBI and the government will appoint equal number of members in the Committee with the RBI governor having a casting vote.

3. The MPC will be entrusted with the task of fixing the benchmark policy interest rate.

Which of the following statements is/are correct?

1 and 2

2 and 3 only

1 only

1, 2 and 3

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Explanation:

The MPC will have six members. Three each will be nominated by the government and the RBI. The MPC is entrusted with the task of fixing the benchmark policy interest rate (Repo rate) to take inflation within the target level. Notable among countries which have adopting inflation targeting as a monetary policy objective are New Zealand, England, Canada, South Africa, Sweden, among others. Most of these countries have implemented Their monetary policy targets through MPC’s after formally adopting inflation targeting as a monetary policy objective.