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Bi-monthly Monetary Policy Statement:
A panel headed by Urjit Patel has recommended for the bi-monthly monetary policy review. Accordingly RBI has changed to bi-monthly monetary policy review in the year 2014. Therefore Monetary policy is reviewed every 2 months i.e, six times in a year by the Monetary Policy Committee.
Monetary Policy Committee:
Monetary Policy Committee is a body of RBI consisting of 6 members (3 members from RBI & 3 members from Government of India). The 3 members of MPC from RBI are RBI Governor who acts as the head of the MPC, RBI deputy governor & an officer from the RBI. The members from the government are selected by a Search-cum-selection committee headed by the cabinet secretary. The Monetary Policy Committee meets atleast 4 times a year.
Present Members of the Monetary Policy Committee:
The three members from the RBI are Governor Urjit Patel, R Gandhi and Michael Patra. The three members from the government are Chetan Ghate, Professor at Indian Statistical Institute, Pami Dua, Director at Delhi School of Economics and Ravindra Dholakia, Professor of IIM Ahmedabad .
Fifth Bi-monthly Monetary Policy Statement 2018-19:
|Reverse Repo Rate||6.25%|
|Marginal Standing Facility||6.75%|
|Cash Reserve Ratio||4%|
|Stautory Liquidity Ratio||19.5%|
|Inflation for 2nd half of 2018-19 FY||2.7% to 3.2%|
|Inflation for 1st half of 2019-20 FY||3.8% to 4.2%|
|GDP growth rate projection for 2018-19 FY||7.4%|
|GDP growth rate projection for first half of 2019-20 FY||7.5%|
Repo rate :
The rate of interest RBI charges on the short term borrowings to the banks is the repo rate.
Reverse repo rate:
It is the rate of the interest the RBI pays to its clients such as banks who offer short term
loan to it.
It is an interest rate at which RBI lends its long-term loans to the Government of India, state governments, financial institutions,NBFCs etc.
Marginal standing facility :
A higher interest rate at which the banks can borrow overnight upto 1% of the net demand & time liabilities from the RBI .
Cash Reserve Ratio:
It is the ratio of the total deposits of a bank i.e, kept with RBI in the form of cash.
Statutory Liquidity Ratio:
It is a portion of time & demand liabilities to be maintained by the bank in the form of government securities, public sector bonds, current account balances with other banks, gold.
Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time.
Gross Domestic Product:
GDP is the final value of the goods and services produced within the geographic boundaries of a country during a specified period of time.