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Monetary Policy Committee(MPC) and Repo Rate

  Jul 03, 2020

Monetary Policy Committee(MPC) and Repo Rate

What were the decisions at the recent Monetary Policy Committee(MPC)?

  1. MPC was constituted in 2016 to bring transparency in India’s monetary policy. It publishes it’s report once in every 2 months.
  2. The Monetary Policy Committee (MPC) released its fifth bi-monthly Monetary Policy Statement of 2019-20 on December 19.
  3. The MPC decided to continue with an accommodative stance of monetary policy.
  4. Accomodative stance is used to pump money in the economy to ensure more credit flow. 
  5. The policy repo rate (the rate at which RBI lends money to banks) remained unchanged at 5.15%.  
  6. The reverse repo rate (the rate at which RBI borrows money from banks) remained unchanged at 4.9%. 
  7. The marginal standing facility rate (the rate at which banks can borrow additional money) and the bank rate (the rate at which the RBI buys bills of exchange) also remained unchanged at 5.4%