Monetary Policy Committee (MPC)

• Monetary Policy managed by MPC
• Headed by RBI Governor
• 6-member committee
• 3- from the RBI, three members will be appointed by the central government. 

INFLATION

• The rate at which prices rise
• The inflation target of the Reserve Bank of India is 4% (+/- 2%).
• India is a current account deficit country, therefore depreciation is bad,  making imports more expensive.

PYQs

Which of the following statements is/are correct regarding the Monetary Policy Committee(MPC)? [CSE 2017]

1. It decides the RBI's benchmark interest rates.
2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
3. It functions under the chairmanship of the Union Finance Minister.

Select the correct answer using the code given below:

(A) 1 only

(B) 1 and 2 only

(C) 3 only

(D) 2 and 3 only

ANS:[A]