Monetary Policy Committee (MPC)

Context

In a 5:1 majority decision, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has decided to keep the Repo rate unchanged at 6.5%. This decision is aligned with the policy stance of ‘withdrawal of accommodation.’

 Monetary Policy Committee (MPC)

The Reserve Bank of India Monetary Policy Committee (MPC) is a six-member committee responsible for formulating and implementing monetary policy in India. Its primary objective is to maintain price stability while also supporting economic growth.

Mandate:

• Maintain price stability: The MPC is mandated to maintain India’s annual inflation at 4%, with an upper tolerance of 6% and a lower tolerance of 2%. This mandate is set by the Government of India under the Flexible Inflation Targeting framework.
• Support economic growth: The MPC also considers the state of the economy when making monetary policy decisions. It aims to support economic growth while maintaining price stability.

Composition:

• Six members: The MPC consists of three official members from the Reserve Bank of India and three external members nominated by the Government of India.
• Governor chairs: The Governor of the Reserve Bank of India chairs the MPC.
• Current members: As of December 8, 2023, the members of the MPC are:

     Official members:

• Shaktikanta Das, Governor
• Rajiv Ranjan, Executive Director
• Michael Patra, Deputy Governor

     External members:

• Shashanka Bhide
• Ashima Goyal
• Jayanth R Varma