10 facts about the Monetary Policy Committee (MPC) of India
Established in 2016 by the Reserve Bank of India (RBI) Act, 1934.
Objective is to determine and implement the monetary policy framework to achieve the inflation target set by the Government of India.
Six members – Three members nominated by the Central Government, one member from the Reserve Bank of India, and two external experts.
The MPC meets at least four times a year to review the monetary policy and take necessary decisions.
Decisions are taken by a majority vote, with the Governor of the RBI having the casting vote in case of a tie.
Minutes of the MPC meetings, including the individual votes of each member, are made public after every meeting.
The MPC utilizes various instruments to implement the monetary policy, such as repo rate, reverse repo rate, open market operations, and marginal standing facility.
The MPC follows a flexible inflation targeting framework, aiming to achieve an inflation target of 4% with a tolerance band of +/- 2%.
Since its inception, the MPC has been successful in maintaining inflation within the target range, contributing to macroeconomic stability.