Q. With reference to the Monetary Policy Committee (MPC) of the Reserve Bank of India, how many of the following statements are correct?
1.It manages the foreign exchange reserves of the country.
2.It also advises the government on budgetary allocations.
3.It has been constituted under the Reserve Bank of India Act, 1934.
Select the correct answer using the codes given below:
Answer: A
Notes:
Explanation –
Statements 1 and 2 are incorrect. The Monetary Policy Committee (MPC) does not manage the foreign exchange reserves of the country. The management of foreign exchange reserves is the responsibility of the Reserve Bank of India (RBI), particularly its Department of External Investments and Operations. The MPC’s primary function is to determine the policy interest rate (repo rate) to achieve the inflation target set by the RBI. It does not advise the government on budgetary allocations, which is a function of the Ministry of Finance and the Parliament.
Statement 3 is correct. The Monetary Policy Committee (MPC) has been constituted under the Reserve Bank of India Act, 1934.
Source: The Hindu
