Monetary policy committee sees further slowdown in growth

News:The Reserve Bank of India(RBI) has released the minutes of the monetary policy committee (MPC) meeting.


  • In its fourth Bi-monthly policy review,the Reserve Bank of India’s(RBI) Monetary Policy Committee(MPC) has reduced the interest rates by 25 basis points to 5.15 % from 5.40 %.

Key takeaways from the MPC meeting:

  • All the six members of the MPC has voted for a rate cut to revive domestic demand citing the room provided by inflation which is within the target of 4%.
  • The members have also decided to continue with an accommodative stance as long as it is necessary to revive growth while ensuring that inflation remains within the target.
  • The members said that the growth in the consumption demand has reduced due to rising unemployment and ongoing stress in the banking system.
  • They also said that the private investment has lost traction due to corporate sector reluctant to make fresh investments.

Additional information:

About Monetary Policy Committee(MPC):

  • The Monetary Policy Committee(MPC) is a committee of the Reserve Bank of India.
  • The MPC is made up of six members with three nominated by the Union government and three representing the RBI.
  • The MPC is mandated by law to ensure that retail inflation stays within a band of two percentage points of the target inflation rate of 4%.