Context- RBI in its 6th bi-monthly MPC meeting voted unanimously to maintain status quo on benchmark interest rates to support the economy. What were the key highlights of latest MPC meeting? The Monetary Policy Committee (MPC) recently left benchmark interest rates unchanged and maintained an ‘accommodative’ policy stance as it prioritized support for the economy’s… Continue reading Highlights of MPC meeting
Tag: ECO_1
RBI monetary policy Explained: Why have rates been kept unchanged yet again?
Source: Click here News: Reserve Bank of India’s(RBI) Monetary Policy Committee(MPC) has announced its bi-monthly monetary policy review for the month of December. Facts: Key Takeaways: Repo Rate: It is the rate at which the RBI lends money to the banks for a short term.It remains unchanged at 4%. Reverse Repo Rate: It is the short term borrowing… Continue reading RBI monetary policy Explained: Why have rates been kept unchanged yet again?
RBI sets up Reserve Bank Innovation Hub(RBIH)
News: Reserve Bank of India(RBI) has announced the setting up of an Innovation Hub under the chairmanship of Kris Gopalakrishnan.It has also selected two entities for testing products under regulatory sandbox structure. Facts: Aim: To create an ecosystem that would focus on promoting access to financial services and products and will also promote financial inclusion. Features: The… Continue reading RBI sets up Reserve Bank Innovation Hub(RBIH)
Effectiveness of Monetary Policy in India | Nov. 11th, 2020
What is Monetary Policy? Monetary policy is the process by which the RBI controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability. Quantitative Instruments: General or indirect (Cash Reserve Ratio, Statutory Liquidity Ratio, Open Market Operations, Bank Rate, Repo Rate, Reverse Repo Rate, Marginal standing facility and… Continue reading Effectiveness of Monetary Policy in India | Nov. 11th, 2020
Reserve Bank of India (RBI) governance
Context– RBI has to answer to Parliament why it misses the inflation target and what plans do they have to control inflation. What is Inflation targeting and what happen when RBI fails to meet inflation target? Inflation targeting involves using monetary policy to keep inflation close to the agreed target. RBI and Government of India… Continue reading Reserve Bank of India (RBI) governance
Base year of CPI-IW changed
The Labour and Employment Ministry on Thursday revised the base year of the Consumer Price Index for Industrial Workers (CPI-IW) from 2001 to 2016. Why the base year for the Consumer Price Index for Industrial Workers(CPI-IW) has been changed? Due to the changing consumption pattern, more weightage has been given to spending on health, education,… Continue reading Base year of CPI-IW changed
India’s inflation targeting policy (Monetary policy)
Source – Live Mint Syllabus- GS-3 Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. Context- Inflation targeting and the decisions of Monetary Policy Committee (MPC). What causes inflation? The primary cause of inflation is the mismatch between demand and supply. The mismatch can be in following context- Excess money supply that raises… Continue reading India’s inflation targeting policy (Monetary policy)
Demand to Rework Inflation Targeting Regime
Source: Indian Express Gs3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment. Context: Recently the monetary policy committee (MPC) concluded that elevated inflation has constrained it from easing policy rates. Why there is demand to rework inflation targeting regime? Economy slowdown:Since the growth rate is falling that is why question have been… Continue reading Demand to Rework Inflation Targeting Regime
