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RBI policy: The Reserve Bank of India (RBI) may consider increasing the repo rate once again in the bi-monthly monetary policy review meeting to be held from 6 to 8 February. 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 car loans and they will become costlier. The repo rate has been increasing continuously since the last 5 monetary policy review meetings. Prior to that, the repo rate was also reduced several times during the Corona pandemic. In such a situation, the question arises that why this monetary policy review meeting is held only every two months? And what are the things discussed during the meeting? In today’s story, you will know the answers to all these questions.
What does the constitution say about this committee?
The Reserve Bank of India Act 1934 (which was amended in 2016) states that the RBI is entrusted with the responsibility of conducting monetary policy to maintain price stability keeping in mind 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 suddenly decreasing demand for the same 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 on March 31, 2021, in which from April 1, 2021 to March 31, 2026, the rate of inflation in the country was fixed at a maximum of 6 percent and a minimum of 2 percent. That is, the target of CPI (Consumer Price Index) is 4 percent. Please tell, this committee consists of a 6-member team.
What is discussed in 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 has to be held at least four times a year. All the members have one vote in this. In case of equality of votes, the Governor has a casting vote. Explain, the duration of monetary policy meetings is decided by the committee. If the committee feels that there is a need to hold the meeting more than 4 times in a year, then it issues a notification in this regard, as was issued last time, which said that the meeting of the Monetary Policy Committee for 2022-23 The meeting will be held 6 times which will be in the months of April, June, August, September, December and February.
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