Editorial: Risky recourse; MPC holds rates
The Monetary Policy Committee of the RBI decided to keep its policy repo rate unchanged at 6.5%. However, it raised the projection for retail inflation in the current fiscal by 30 basis points to 5.4%.
Editorial: Risky recourse; MPC holds rates
The Monetary Policy Committee of the RBI decided to keep its policy repo rate unchanged at 6.5%. However, it raised the projection for retail inflation in the current fiscal by 30 basis points to 5.4%.
The MPC retained it projection for real GDP growth in 2023-24 at 6.5%.
The RBI temporarily imposed an incremental 10% increase in the cash reserve ratio with a view to draining some of the surplus liquidity in the banking system.
• MPC- Monetary Policy Committee- it is entrusted with the task of fixing the benchmark policy rate required to control inflation within the specified target level and to add value and transparency to monetary policy decisions.
It has 6 members- three appointed by RBI and the remaining nominated by an external selection committee.
Decisions are based on majority, with each member having one vote. The RBI Governor has the casting vote.
• real GDP- Real GDP is an inflation-adjusted calculation that analyses the rate of all commodities and services manufactured in a country for a fixed year.
• CRR- It is a certain minimum amount of deposit that the commercial banks have to hold as reserves with the central bank.CRR helps in keeping inflation under control.