Current Trends in Indian Economy
MPC Meeting
- The Monetary Policy Committee (MPC) of the Reserve Bank of India decided unanimously to keep the policy repo rate unchanged at 6.5% even as it raised the projection for retail inflation in the current fiscal year by 30 basis points to 5.4%.
- The MPC retained its projection for real GDP growth in 2023-24 at 6.5%.
- To address the problem of excess liquidity with banks, the RBI decided that with effect from the fortnight beginning August 12, scheduled banks would maintain an incremental cash reserve ratio of 10% on the increase in their net demand and time liabilities (NDTL) between May 19, 2023 and July 28, 2023.
About MPC
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- Under Section 45ZB of the amended (in 2016) RBI Act, 1934, the central government is empowered to constitute a six-member Monetary Policy Committee (MPC).
- The Monetary Policy Committee shall determine the Policy Rate required to achieve the inflation target.
- Composition: (MPC shall consist of 6 members)
- RBI Governor as its ex officio chairperson,
- Deputy Governor in charge of monetary policy,
- An officer of the Bank to be nominated by the Central Board,
- Three persons to be appointed by the central government.
