Monetary Policy Transmission — Prelims Strategy

Prelims Strategy

Focus on memorizing specific facts about MPC composition (6 members, Governor as chairperson, 3 RBI + 3 external), meeting frequency (bi-monthly), and decision-making process (majority vote). Remember key dates: MPC established 2016, external benchmarks introduced October 2019, inflation target 4% +/- 2%.

Understand the five transmission channels with examples - interest rate (repo to lending rates), credit (bank lending capacity), exchange rate (capital flows), asset price (equity/real estate), expectations (forward guidance).

Know the difference between MCLR and external benchmark systems. Practice elimination techniques by understanding what each channel does NOT include. Common traps include confusing transmission channels, mixing up MCLR and external benchmark applicability, and incorrect MPC composition details.

Focus on recent RBI measures and their specific impacts rather than theoretical concepts.

Also build Paper II skills

Regional comparisons and process chains train the same coherence and inference habits CSAT passages demand. CSAT hub.

• Data interpretation
• Estimation techniques
• Logical deductions