DMPQ:Write a short note on Monetary Policy Committee.

The Monetary Policy Committee of India is a committee of the Reserve Bank of India that is responsible for fixing the benchmark interest rate in India. The meetings of theMonetary Policy Committee are held at least 4 times a year and it publishes its decisionsafter each such meeting.

The committee comprises six members – three officials of the Reserve Bank of India andthree external members nominated by the Government of India.They need to observe a “silent period” seven days before and after the rate decision for”utmost confidentiality”. The Governor of Reserve Bank of India is the chairperson exofficio of the committee.

Decisions are taken by majority with the Governor having the casting vote in case of atie. The current mandate of the committee is to maintain 4% annual inflation untilMarch 31, 2021 with an upper tolerance of 6% and a lower tolerance of 2%.

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