In News
- The Reserve Bank of India (RBI) said that it would hold an additional Monetary Policy Committee (MPC) meeting recently.
Key Points
- Reason for Additional Meeting:Â
- The RBI has failed to maintain the consumer price index (CPI) inflation target within the 2-6 percent band for three consecutive quarters (January to September 2022)
- The Regulation 7 of the RBI MPC and Monetary Policy Process Regulations, 2016:
- States that a separate meeting is required to be scheduled as part of the normal policy process to discuss and draft the report to be sent to the government.
- Â Section 45ZN of the Reserve Bank of India (RBI) Act, 1934:Â
- States that in case the RBI fails to meet the inflation target, it has to present a report to the government explaining the reasons for the failure.Â
- In the report, the central bank will have to mention the remedial actions it proposes to take.
About Monetary Policy Committee (MPC)
- Constituted by: RBI under section 45ZB of the Reserve Bank of India (RBI) Act, 1934.
- Mission: Fixing the benchmark policy interest rate (repo rate) to restrain inflation within the particular target level (2% to 6%).Â
- Chairman: the Governor of RBI
- MPC meetings:
- Currently, the MPC meets six times in a financial year, which is every two months.Â
- The schedule of the MPC meetings for the entire financial year is announced in advance.
- The monetary policy is published after every meeting with each member explaining his opinions.Â
Source: IE
