Repo rate kept unchanged
Part of: GS Prelims and GS-III- Economy
- The Monetary Policy Committee (MPC) decided to keep the interest rates unchanged in the wake of a rise in inflation.
From Prelims Point of view:
Monetary Policy Committee (MPC):
- MPC is a six-member committee constituted by the Central Government
- Section 45ZB of the amended RBI Act, 1934
- Once in every six months, the Reserve Bank is required to publish a document called the Monetary Policy Report to explain: (1) the sources of inflation and(2) the forecast of inflation for 6-18 months ahead.
- 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.
- REPO denotes Re Purchase Option – the rate by which RBI gives loans to other banks. In other words, it is the rate at which banks buy back the securities they keep with the RBI at a later period.