RBI policy: The Reserve Bank of India (RBI) may consider raising the repo rate once more at the bi-monthly monetary policy review meeting from February 6-8. Experts believe that this time there will be an increase in the repo rate of 0.25 basis points. This will have a direct impact on the EMI of home and auto loans and they will become more expensive. The repo rate has been increasing continuously since the last 5 monetary policy review meetings. Before that, the buyback rate was also reduced several times during the Corona pandemic. Given such a situation, the question arises as to why this monetary policy review meeting is held only every two months? And what are the things that are discussed during the meeting? In today’s story, you will learn the answers to all these questions.
What does the constitution say about this committee?
The Reserve Bank of India Act 1934 (as amended in 2016) states that the RBI has the responsibility of conducting monetary policy to maintain price stability keeping in view the objective of development. In simple language, meetings have to be held from time to time to maintain a balance between the rising inflation in the country and the sudden decline in demand for it in the market. Under Section 45ZA, the RBI, in consultation with the Central Government, sets an inflation target once every five years and notifies it in the Official Gazette. The last time this determination was made was on March 31, 2021, in which from April 1, 2021 to March 31, 2026, the inflation rate in the country was set at a maximum of 6 percent and a minimum of 6 percent. of 2 percent. That is, the goal of the CPI (Consumer Price Index) is 4 percent. Please tell us, this committee consists of a team of 6 members.
What is discussed at the meeting?
The objective of the monetary policy review meeting is to change the policy repo rate to achieve the inflation target. It is discussed during the meeting. This meeting should be held at least four times a year. All members have a vote on this. In case of equality of votes, the Governor has the casting vote. Explain, the duration of the monetary policy meetings is decided by the committee. If the committee finds that it is necessary to hold the meeting more than 4 times in a year, then it issues a notice to that effect, as it was issued last time, which said that the Monetary Policy Committee meeting for 2022-23 The meeting will be held. on 6 occasions which will be in the months of April, June, August, September, December and February.
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