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Question

What is Monetary Policy Framework Agreement?

A It is an agreement reached between Government and NITI Aayog on the maximum tolerable inflation rate that RBI should target to achieve price stability. Correct Answer Incorrect Answer
B It is an agreement reached between Government and the Planning Commission on the maximum tolerable inflation rate that RBI should target to achieve price stability. Correct Answer Incorrect Answer
C It is an agreement reached between Government and the Reserve Bank of India on the maximum tolerable inflation rate that RBI should target to achieve price stability. Correct Answer Incorrect Answer
D It is an agreement reached between CII (Confederation of Indian Industry) and the Reserve Bank of India on the maximum tolerable inflation rate that RBI should target to achieve price stability. Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

Monetary Policy Framework Agreement is an agreement reached between Government and the central bank in India – the Reserve Bank of India (RBI) - on the maximum tolerable inflation rate that RBI should target to achieve price stability. The Reserve Bank of India and Government of India signed the Monetary Policy Framework Agreement on 20 February 2015 which made inflation targeting and achieving price stability the responsibilities of RBI.

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