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High inflation ‘a major concern’ for Economy

Published on June 23, 2022
Current Context: According to the RBI Monetary Policy Committee (MPC) meeting high inflation is a major concern for the economy, even though they have hiked key interest rates to check price rise.
High inflation ‘a major concern’ for Economy
  • As per RBI, this is the time appropriate to go for a further increase in the policy rate to effectively deal with inflation and inflation expectations.
  • The primary mandate of RBI is a commitment to price stability its prerequisite for sustainable growth over the medium term.
  • Besides raising the repo rate to 4.9%, the Reserve Bank also revised upwards its inflation forecast for the current fiscal to 6.7% from its earlier estimate of 5.7%.
  • It is also important for both government state & center to develop their budgeted Capex plans and work through their counter-cyclical policy levers to ensure a soft-landing for the economy.
  • It is also expected that the repo rate is still below the pre-pandemic level and the liquidity surplus is still higher than what it was prior to the pandemic.


Q.1 Consider the following statements regarding Monetary Policy Committee?

A.MPC comprises the RBI Governor, two central bank officials, and three independent members nominated by the government.
B.This MPC meeting will be held once a year

Select the correct option given below
a. Only A
b. Both A & B
c. Only B
d. None of the above
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