About MPC

• • The Monetary Policy Committee (MPC) is a committee of the RBI which is entrusted with the task of fixing the benchmark policy interest rate (repo rate) to contain inflation within the specified target level.
  • Under the flexible inflation targeting (FIT) framework, the RBI targets to contain Consumer Price Index (CPI) based inflation within 4 percent with a tolerance band of (+/-) 2 percent for the period April 1, 2021, to March 31, 2026. (FIT is a monetary policy strategy used by the Central Bank to maintain the inflation level within a certain range) 
  • The 2016 amendment of the Reserve Bank of India Act, 1934 provides for a statutory and institutionalised framework for the MPC.
  • The MPC has six members: RBI Governor (Chairperson), RBI Deputy Governor in charge of monetary policy, one official nominated by the RBI Board and remaining 3 members would represent the Government. 

• The MPC makes decisions based on majority vote. In case of a tie, the RBI governor will have a second or casting vote.  

Why in News?

• The Monetary Policy Committee (MPC) of RBI unanimously decided to keep key interest rates unchanged, raised its GDP growth projection for 2023-24 to 7% from 6.5%, and retained its average inflation forecast at 5.4%, while warning that inflation could spike through November and December.

• Upgrading its growth forecast, the MPC reckoned that the real GDP growth for 2023-24 would be 7%, with the third quarter clocking 6.5% growth and the fourth quarter 6%. 

https://www.thehindu.com/business/Economy/rbi-keeps-repo-rate-steady-at-65-amid-robust-economic-growth/article67617221.ece