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MPC starts two days meeting to decide key interest rate

03 Oct 2016 Evaluate

The newly appointed Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel has started its two days meeting (October 3 and 4, 2016) for the fourth bi-monthly monetary policy review for 2016-17. This monetary policy review on October 4 will be the first by the six-member MPC as well as Governor Patel.

Till now, the RBI Governor used to decide on key policy rates, including the repo rate or short-term lending rate. But, this time the all-powerful interest-rate setting panel, whose constitution was notified by the government recently, will take call on interest rate.

Members of the MPC are RBI Governor Urjit Patel; Deputy Governor (in charge of Monetary Policy) R Gandhi; and Executive Director Michael Patra; Chetan Ghate, Professor, Indian Statistical Institute; Pami Dua, Director, Delhi School of Economics; and Ravindra H Dholakia, Professor, Indian Institute of Management, Ahmedabad.

According to the government, a committee-based approach for determining the monetary policy will add lot of value and transparency to monetary policy decisions. The government had in August notified 4 percent inflation target with a range of plus/minus 2 percent for the next five years under the monetary policy framework agreement with the Reserve Bank.

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