The Reserve Bank of India's Monetary Policy Committee presented its last bi-monthly policy review for the current fiscal year.
- The repo rate was kept unchanged at 6 percent.
- The reverse repo rate under the LAF (liquidity adjustment facility) remains at 5.75 percent, and the marginal standing facility (MSF) rate and the bank rate at 6.25 percent.
- Earlier, there were speculations that the RBI would change its monetary policy stance from 'neutral' to 'cautious'.
- The policy is determined on the basis of global uncertainty and inflation.
- At present, there is a huge volatility triggered by rising inflation and uncertainty over the US Federal Bank rate.
- The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 percent within a band of +/- 2 percent while supporting growth.
| Repo Rate |
6% |
| Reverse Repo Rate |
5.75% |
| LAF (Liquidity Adjustment Facility) |
5.75% |
| MSF (Marginal Standing Facility) |
6.25% |
| Bank Rate |
6.25% |
About Monetary Policy Committee (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. 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. The Governor of Reserve Bank of India is the chairperson ex officio of the committee. The committee was created in 2016 to bring transparency and accountability in fixing India's Monetary Policy. The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months.
