Monetary Policy Committee — Current Affairs 2026

Current Affairs Connections

Recent developments and news linked to Monetary Policy Committee.

External MPC Members Express Divergent Views on Stance and Future Rate Trajectory

February 8, 2024 (Minutes of Feb 2024 meeting released)

The minutes of the February 2024 MPC meeting revealed nuanced differences in opinion among members, particularly concerning the monetary policy stance. While the majority voted to keep the repo rate unchanged and maintain the 'withdrawal of accommodation' stance, some external members expressed concerns about the prolonged restrictive stance potentially impacting growth or suggested a shift towards a more neutral stance. For instance, Professor Jayanth R. Varma voted to reduce the repo rate by 25 basis points, citing concerns about growth and the disinflationary trend. Dr. Ashima Goyal, while voting for a pause, emphasized the need for flexibility. This highlights the deliberative nature of the MPC and the value of diverse perspectives, even within a consensus-driven framework. UPSC aspirants should note that individual member statements often provide deeper insights into the economic challenges and policy dilemmas faced by the committee.

UPSC Angle: Significance of individual MPC member votes and statements, the role of external members in bringing diverse perspectives, the debate between prioritizing growth vs. inflation control, and the concept of 'dissent notes' in enhancing transparency and accountability of the MPC.

Background (2024)

Earlier events that provide context for this topic.

MPC Maintains Repo Rate at 6.50%, Focus on Inflation Target Amid Global Headwinds

April 5, 2024

In its first monetary policy review of FY25, the MPC unanimously decided to keep the policy repo rate unchanged at 6.50%. This decision marked the seventh consecutive meeting where the rate was held steady, signaling a cautious approach amidst persistent global uncertainties and domestic food inflation pressures. The MPC reiterated its commitment to 'withdrawal of accommodation' to ensure inflation progressively aligns with the 4% target while supporting growth. Governor Shaktikanta Das highlighted the need for continued vigilance on inflation, especially given the volatile food prices and geopolitical risks. This reflects the MPC's current strategy of 'wait and watch' after a series of rate hikes, allowing previous actions to fully transmit through the economy. From a UPSC perspective, this demonstrates the MPC's balancing act between price stability and growth, and its responsiveness to evolving economic data.

UPSC Angle: Analysis of MPC's 'withdrawal of accommodation' stance, reasons for pausing rate hikes, impact of global factors (e.g., crude oil prices, geopolitical tensions) on domestic inflation and growth, and the effectiveness of monetary policy transmission in the current economic cycle.