Policy Rates and Tools — Current Affairs 2026

Current Affairs Connections

Recent developments and news linked to Policy Rates and Tools.

RBI maintains repo rate at 6.50% in December 2024 MPC meeting

December 2024

The Monetary Policy Committee's decision to maintain the repo rate reflects the central bank's assessment of inflation-growth dynamics. With retail inflation showing signs of moderation and growth momentum remaining resilient, RBI adopted a wait-and-watch approach. This decision demonstrates the practical application of inflation targeting framework where policy rates are adjusted based on inflation projections and growth considerations. The unchanged stance also reflects concerns about global economic uncertainty and the need to maintain policy flexibility.

UPSC Angle: Questions may focus on factors influencing MPC decisions, the trade-off between inflation control and growth support, and the effectiveness of current policy stance in achieving dual objectives.

Introduction of UPI-based digital lending platforms and their impact on monetary policy transmission

November 2024

The rapid growth of digital lending platforms has created new channels for monetary policy transmission, potentially improving the speed and effectiveness of policy rate changes. These platforms, often linked to fintech companies and NBFCs, can adjust lending rates more quickly than traditional banks, creating a more responsive transmission mechanism. However, this also raises concerns about regulatory oversight and the need for RBI to adapt its policy tools to account for these new intermediaries.

UPSC Angle: Expected questions on how technological innovations affect monetary policy transmission, the challenges of regulating digital lending, and the implications for financial stability and inclusion.