Question

The Reserve Bank of India (RBI) released its fifth bi-monthly monetary policy statement for 2019-20 in which the Monetary Policy Committee (MPC), led by [1], decided to keep the policy repo rate unchanged at 5.15%. In 2019, the RBI has cut repo rate by 135 basis points so far to a nine-year low of 5.15%. Analysts were expecting another 25 basis points cut. The RBI said it is against any kind of private digital currency as currency is a soveriegn function. The apex bank has however started initial discussions to launch its own digital currency. RBI said that it is not worried about fiscal deficit, but wants greater clarity on counter-cyclical fiscal measures. Stock markets erased all the gains and fell led by a drop in banking stocks after Reserve Bank of India unexpectedly maintained its key rates. The Reserve Bank of India will not allow any NBFC to collapse, it said adding that it knows which NBFCs are vulnerable and are being monitored.

The current mandate of the Monetary Policy Committee (MPC) is to maintain 4% annual inflation until 31 March 2021 with an upper tolerance of _____________ and a lower tolerance of _____________.

Options

• 8% and 3%

• 7% and 3%

• 6% and 2%

• 6.5% and 3.5%

Answer 1

6% and 2%

Explanation:

The current mandate of the Monetary Policy Committee (MPC) is to maintain 4% annual inflation until 31 March 2021 with an upper tolerance of 6% and a lower tolerance of 2%.