Monetary Policy Committee
A six-member committee constituted under Section 45ZB of the RBI Act, 1934, chaired by the RBI Governor, that sets the policy repo rate to achieve the flexible inflation target of 4% (+/- 2%).
Verified references:Source
On UPSC.wiki
Current affairsPLFS September 2026: India's Labour Force Participation Rate Rises to 55.5%, Unemployment Steady at 5%The National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) released the Periodic Labour Force Survey (PLFS) Monthly Bulletin for September 2026 on October 15, 2026. The Labour Force Participation Rate (LFPR) rose by 0.2 percentage points year-on-year to 55.5%, while the overall unemployment rate remained steady at 5.0% — indicating stable labour market conditions ahead of the festive season. Current affairsIndia's WPI Inflation Surges to 11.39% in September 2026: Fuel and Food Prices Drive Broad-Based Price PressureIndia's Wholesale Price Index (WPI)-based inflation rose sharply to 11.39% in September 2026 from 9.92% in August 2026, driven primarily by a 25.85% surge in fuel and power prices alongside elevated food and manufactured-goods inflation. The data, released by the Office of Economic Adviser under DPIIT on October 14, 2026, signals broad-based upstream price pressure with implications for monetary policy and cost-of-living trends. Current affairsIMF World Economic Outlook October 2026: India's Growth Upgraded to 7%, Fastest-Growing Major EconomyThe International Monetary Fund (IMF) released its World Economic Outlook (WEO) report titled "Resilience Under Strain, Urgent Choices" on October 14, 2026, upgrading India's FY27 GDP growth forecast to 7% — a 60-basis-point upward revision from the July 2026 WEO. India is projected as the world's fastest-growing major economy, outpacing China (4.5%) by 2.5 percentage points, driven by resilient domestic demand and robust services activity even as global growth faces headwinds from energy price volatility and Middle East conflict spillovers. Current affairsNobel Prize in Economics 2026: Robert E. Hall and Michael Woodford Honoured for Macroeconomic Stabilisation ModelsThe Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2026 was awarded on October 12 to American economists Robert E. Hall (Stanford University) and Michael Woodford (Columbia University) for their work on the "microeconomic foundations of macroeconomic stabilisation." Their models underpin how central banks and governments use fiscal and monetary policy to smooth economic boom-bust cycles, and are directly relevant to how institutions like the RBI and IMF calibrate their responses to economic shocks. Current affairsWorld Bank India Development Update October 2026: GDP Growth Forecast Raised to 7.1% for FY27, India Among Top 10 in AI ReadinessThe World Bank's India Development Update (October 2026) has raised India's GDP growth forecast for FY2026–27 to 7.1% (from 6.6% in April), citing robust domestic demand and export performance. The report's special focus — "India and Artificial Intelligence: Seizing the Development Opportunity" — ranks India among the top 10 emerging markets in AI readiness and notes that private AI investment in India tripled to USD 4.1 billion in 2025 from USD 1.2 billion in 2024. Current affairsRBI MPC October 2026 Decision: Repo Rate Raised to 5.5% — First Hike Since February 2023, Stance Shifts to Calibrated TighteningThe Reserve Bank of India's six-member Monetary Policy Committee (MPC), at its October 7, 2026 meeting chaired by Governor Sanjay Malhotra, unanimously raised the repo rate by 25 basis points to 5.5% — the first increase since February 2023 — and shifted the policy stance to "calibrated tightening" as rising inflation and elevated global oil prices prompt the central bank to reverse its 2025 easing cycle. Current affairsRBI Monetary Policy Committee (MPC) October 2026 Meeting: Key Context, Rate Watch and Monetary Policy FrameworkThe Reserve Bank of India's Monetary Policy Committee (MPC) commenced its three-day bi-monthly meeting on October 5, 2026, with the policy decision scheduled for announcement on October 7. The current repo rate stands at 5.25%, held unchanged across four consecutive meetings since a 125 basis-point cumulative easing cycle in 2025. The 63rd MPC meeting takes place against a backdrop of rising retail inflation (~4.82% in August 2026) and elevated global interest rates. Current affairsSouthwest Monsoon 2026 Ends with 12.6% Rainfall Deficit — Worst Since 2015, East and Northeast India Hardest HitIndia's 2026 southwest monsoon season (June–September) ended with a cumulative rainfall deficit of approximately 12.6% below the Long Period Average (LPA), recording 87% of normal rainfall at about 759 mm against the seasonal normal of 869 mm. It is the worst monsoon since 2015 and the fourth-lowest since 2001. East and Northeast India suffered the most severe deficit at 25.6% below normal, with the region recording its lowest monsoon rainfall since 1901. Current affairsCabinet Approves Rabi MSP 2027-28: Safflower Gets Highest Hike of ₹675/quintal, Wheat at ₹2,610The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved Minimum Support Prices (MSP) for all six mandated Rabi crops for the 2027-28 marketing season on September 30, 2026. Safflower received the highest absolute increase of ₹675/quintal, followed by mustard/rapeseed at ₹413/quintal. Wheat MSP was set at ₹2,610/quintal, up by ₹25. All MSPs are fixed at a minimum of 1.5 times the all-India weighted average cost of production, as announced in Union Budget 2018-19. Current affairsOECD Raises India's FY2027 GDP Growth Forecast to 7.1%: 80 Basis Points Upgrade in September 2026 Interim Economic OutlookThe Organisation for Economic Co-operation and Development (OECD) raised India's GDP growth forecast for FY2026–27 to 7.1% in its September 2026 Interim Economic Outlook — an upgrade of 80 basis points from the June 2026 estimate of 6.3% — citing resilient domestic demand, rural recovery, and easing global commodity prices. India remains the fastest-growing major economy in the OECD's projection table. Current affairsADB Raises India's FY2026-27 GDP Growth Forecast to 7%: Asian Development Outlook September 2026The Asian Development Bank (ADB) upgraded India's FY2026-27 GDP growth forecast from 6.6% to 7.0% in its Asian Development Outlook (ADO) September 2026 update, citing 7.8% year-on-year growth in Q1 FY27, robust investment demand, resilient consumption, and strong manufacturing and services expansion. FY2027-28 is projected at 7.1%. Current affairsUS Lindsey Graham Russia Sanctions Act 2026: India's Energy Security and the 100% Tariff Threat on Russian Oil ImportsThe US President signed the "Lindsey O. Graham Sanctioning Russia and Iran Act of 2026" on September 18, 2026, authorising tariffs of up to 100% on countries among the five largest purchasers of Russian crude oil and gas. India, which imports approximately 2.08 million barrels per day from Russia (≈45% of its total crude imports), faces potential designation — raising fundamental questions about India's energy security architecture and strategic autonomy doctrine.
In previous-year questions
- In its August 2026 monetary policy review, the RBI's Monetary Policy Committee raised the FY2026-27 real GDP growth forecast to 6.7% (from 6.6%) and revised the CPI inflation forecast downward to 5.0% (from 5.1%). The unanimous MPC decision to hold rates was chaired by which RBI Governor?OTHER · Current Affairs
- Which section of the RBI Act, 1934 empowers the Central Government to set the inflation target in consultation with the RBI — a process that established the current 4% (±2%) CPI target for the Monetary Policy Committee?OTHER · Current Affairs
- In the RBI's August 2026 Monetary Policy Committee meeting, core CPI inflation (excluding food and fuel) remained stable at approximately 3.9%. Which of the following correctly describes the MPC's quarterly CPI inflation projection for Q3 FY2026-27?OTHER · Current Affairs
- The Monetary Policy Committee (MPC) of the Reserve Bank of India consists of how many members, and who holds the casting vote in the event of a tie?UPSC · Current Affairs
- Under the Flexible Inflation Targeting (FIT) framework, which body is legally responsible for setting the inflation target in India?UPSC · Current Affairs
- At its August 2026 meeting, the RBI Monetary Policy Committee (MPC) kept the policy repo rate unchanged at 5.25% and retained the Neutral stance. It also revised the FY 2026-27 GDP growth forecast. To what figure was it revised?UPSC · Current Affairs
- If the RBI's MPC fails to maintain inflation within the mandated 2%–6% band for three consecutive quarters, what is the prescribed consequence under the RBI Act, 1934?UPSC · Current Affairs
- Under which provision of the Reserve Bank of India Act, 1934 does the Central Government appoint part-time non-official directors on the RBI Central Board?UPSC · Current Affairs
- Which of the following correctly describes the role of the RBI Central Board in relation to India's monetary policy?UPSC · Current Affairs
- The 97th Constitutional Amendment (2012) is most directly relevant to which of the following?UPSC · Current Affairs
- The Monetary Policy Committee (MPC) of the Reserve Bank of India, which sets the policy repo rate, was established under which provision of the RBI Act, 1934?UPSC · Current Affairs
- India's Flexible Inflation Targeting (FIT) framework, under which the RBI's Monetary Policy Committee (MPC) operates, mandates keeping Consumer Price Index (CPI) inflation at a specific target. What is the inflation target and the tolerance band under the FIT framework?OTHER · Current Affairs