Picture : Twitter/ ANI
The monetary policy committee of the Reserve Bank of India is all set for its bi-monthly review meeting starting today.
Like several other central banks, the main focus of the RBI during the three-day-long meet will again remain on containing high inflation.
The MPC is a six-member body that is mandated to determine the policy interest rates required to achieve the inflation target while keeping in mind the objective of economic growth. As of now, this committee meets at least six times in a financial year, i.e every two months.
In its previous review meeting in early August, the monetary policy committee had unanimously decided to raise the repo rate by 50 basis points to 5.40 per cent in order to contain the persistently high inflation. The hike took the repo rate above pre-pandemic levels of 5.15 per cent.
Raising interest typically suppresses demand in the economy, thereby helping inflation to decline.
The committee had in its previous meeting decided to remain focused on the “withdrawal of accommodation” stance to ensure that inflation remains within the target while supporting growth.
In line with the global trend of monetary policy tightening to cool off inflation, the RBI has so far hiked the key repo rates — the rate at which the central bank of a country lends money to commercial banks — by 140 basis points.
The MPC reiterated that retail inflation is projected to remain above the upper tolerance level of 6 per cent through the first three quarters of 2022-23.
