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MONETARY POLICY
IN NEWS
IN NEWS
IN NEWS
IN NEWS
RELEVANCE – RBI GRADE B
RELEVANCE – NABARD GRADE A
RELEVANCE – SEBI GRADE A
EXPECTED QUESTION…..

Explain monetary policy and the role of the

Monetary Policy Committee, with a focus on the
most recent monetary policy decisions?
400 WORDS 10 MARKS
LET’S BREAK IT DOWN…..
Explain monetary policy and the role of the Monetary Policy
Committee, with a focus on the most recent monetary policy
decisions?
400 WORDS 10 MARKS
1. INTRODUCTION: Explain monetary policy
2. BODY PART-1 : Elaborate the role of MPC
3. BODY PART-2 : Recent decisions
4. CONCLUSION: Way forward
LET’S BREAK IT DOWN…..
Explain monetary policy and the role of the Monetary Policy
Committee, with a focus on the most recent monetary policy
decisions?
400 WORDS 10 MARKS
1. INTRODUCTION: Explain monetary policy
2. BODY PART-1 : Elaborate the role of MPC
3. BODY PART-2 : Recent decisions
4. CONCLUSION: Way forward
1. INTRODUCTION
❑ It is the macroeconomic policy laid down by the central bank, involving
management of money supply and interest rate.
❑ used to achieve macroeconomic objectives like inflation, consumption,
growth and liquidity.
❑ aimed at managing the quantity of money in order to meet the
requirements of different sectors of the economy and to increase the
pace of economic growth.
❑ The RBI implements the monetary policy through open market
operations (OMOs), bank rate policy, reserve system, credit control
policy, moral persuasion, etc.
❑ For example, the RBI introduces the money in the economy and cuts the
interest rate by buying bonds through OMOs.
LET’S DELVE DEEPER!
LET’S BREAK IT DOWN…..
Explain monetary policy and the role of the Monetary Policy
Committee, with a focus on the most recent monetary policy
decisions?
400 WORDS 10 MARKS
1. INTRODUCTION: Explain monetary policy
2. BODY PART-1 : Elaborate the role of MPC
3. BODY PART-2 : Recent decisions
4. CONCLUSION: Way forward
3. BODY PART-2 MPC
The Reserve Bank of India (RBI) Act,
1934 was amended by the Finance
Act, 2016 to constitute Monetary
Policy Committee.
• responsible for fixing the benchmark interest rate in India, bringing
more transparency and accountability in fixing India's Monetary
Policy.
• committee comprises six members - three officials of the RBI and
three external members nominated by the Government of India (GoI).
• The RBI Governor is the chairperson (ex officio) of the committee.
• current mandate of the committee is to maintain 4% (+/- 2%)
annual consumer price index-based inflation (CPI) rate and the
committee is answerable to the GoI if the inflation exceeds the range
prescribed for three consecutive quarters.
LET’S BREAK IT DOWN…..
Explain monetary policy and the role of the Monetary Policy
Committee, with a focus on the most recent monetary policy
decisions?
400 WORDS 10 MARKS
1. INTRODUCTION: Explain monetary policy
2. BODY PART-1 : Elaborate the role of MPC
3. BODY PART-2 : Recent decisions
4. CONCLUSION: Way forward
3. BODY PART-2 Recent decisions
Following are the highlights of RBI’s December 2023 Bi-Monthly Monetary Policy Statement
1. RBI keeps benchmark interest rate
unchanged at 6.5%
2. Proposes to enhance UPI
transaction limit for payment to
hospitals and educational
institutions from Rs 1 lakh to Rs 5 • Inflation outlook to be considerably influenced by uncertain
lakh food prices
3. Hikes GDP growth projection for • Intermittent vegetable price shocks could once again push up
current fiscal to 7% from 6.5% headline inflation in November and December
earlier • to improve customer-centricity and transparency in digital
4. Retains average retail inflation lending.
projection at 5.4% for FY24
5. RBI is planning to establish a
regulatory framework for web-
aggregation of loan products
3. BODY PART-2 Recent decisions
6. Rupee exhibited low volatility
compared to its emerging market
peers in 2023
7. The RBI has expanded the limit
on recurring e-payment mandates
for credit card, insurance premia
payments, and mutual fund
investments to Rs 1 lakh from Rs
15,000
8. The RBI has sought to get a
better grip on the growing
incidence of banks and non-
banking finance companies (NBFCs)
partnering with Fintechs
• Relative stability of the rupee reflects the improving
macroeconomic fundamentals and its resilience in the face of
formidable global tsunamis
• As forex reserves stood at $604 billion as on December 1, RBI
remains confident of meeting external financing requirements
comfortably
• RBI to remain vigilant and ready to act, as per the evolving outlook
• India better placed to withstand uncertainties compared to many
other countries
• Will allow for more substantial periodic transactions
• creation of a Fintech Repository by April 2024 proposed
LET’S BREAK IT DOWN…..
Explain monetary policy and the role of the Monetary Policy
Committee, with a focus on the most recent monetary policy
decisions?
400 WORDS 10 MARKS
1. INTRODUCTION: Explain monetary policy
2. BODY PART-1 : Elaborate the role of MPC
3. BODY PART-2 : Recent decisions
4. CONCLUSION: Way forward
4. WAY FORWARD

• In conclusion, monetary policy is a crucial tool for managing a country's

economy, and the monetary policy committee plays a pivotal role in its
formulation and implementation.
• Recent monetary policy decisions have a profound impact on economic
stability and growth, making it essential for policymakers to carefully
consider their implications for the well-being of the nation.
WRITE YOUR ANSWERS IN THE COMMENTS SECTION

Explain monetary policy and the role

of the Monetary Policy Committee,
with a focus on the most recent
monetary policy decisions?
FREE
400 WORDS 10 MARKS EVALUATION
!!!