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    Question

    Read the following Statements and answer the

    question:  India’s inflation target of 4 % ± 2 % is jointly set by RBI and the Ministry of Finance every five years.  The Monetary Policy Committee (MPC) has six members, with the Governor holding a casting vote.  The MPC must meet at least six times a year. 
    A 1 and 2 only Correct Answer Incorrect Answer
    B 2 and 3 only Correct Answer Incorrect Answer
    C 1 and 3 only Correct Answer Incorrect Answer
    D 1, 2 and 3 Correct Answer Incorrect Answer
    E 3 only Correct Answer Incorrect Answer

    Solution

    The MPC is mandated by the amended RBI Act, 1934, to meet at least four times a year to review the policy repo rate. While the legal requirement is four, the committee typically meets six times a year (bi-monthly) to assess inflation and growth, with a quorum of four members.     Under Section 45ZA of RBI Act , i nflation target is notified by Central Government in consultation with RBI . It is r eviewed every 5 years . It is currently set at  inflation target of 4 % ± 2 % , last reviewed in 2021 for  five years.     The Monetary Policy Committee (MPC) has six members,  with 3 members from RBI and 3 external members.  T he Governor  of RBI is the ex-officio Chairman of the MPC and holds  a casting vote .     

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