The Reserve Bank of India’s (RBI) newly reconstituted Monetary Policy Committee (MPC), which is scheduled to meet from October 7-9, is likely to keep the repo rate  unchanged at 6.5 per cent. 

• This would be the tenth consecutive monetary policy when the repo rate would have been left untouched.

About Monetary Policy Committee (MPC)

• Mission: To determine the benchmark policy interest rate (repo rate) with the goal of maintaining inflation within a specific target while fostering economic growth.
• Framework: Established to maintain price stability under a formal structure, while also pursuing economic growth objectives.
  • Formed based on the Urjit Patel Committee recommendation..
• Provision for MPC: Established under Section 45ZB of the amended RBI Act, 1934
  • First constituted on September 29, 2016.

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• Composition: It has 6 members including the Chairman.
  • 3 members from the RBI.
  • 3 government-nominated external members.
    • Three new external members Ram Singh, Saugata Bhattacharya, and Nagesh Kumar, have been appointed replacing previous members whose tenures ended in early October 2024.
  • The Governor of the RBI serves as the ex-officio Chairman.
• Meeting Frequency: The MPC is required to meet at least four times a year.
• Quorum: A minimum of four members is required for a valid meeting.
• Voting: Each member has one vote.
  • In case of a tie, the Governor has a second or casting vote.
• Statement of Vote: Each member must submit a statement explaining the reasons for their vote.
• Monetary Policy Report: The RBI issues a Monetary Policy Report every six months, explaining the origins of inflation and providing inflation estimates for the next 6-8 months.