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%).
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Current affairsWMO Warns of Very Strong El Niño Through Early 2027: India's Monsoon Risks, IOD Interaction, and Global Extreme Weather OutlookThe World Meteorological Organization (WMO) has issued an El Niño/La Niña Update (September 2026) warning of a near-100% probability that a very strong El Niño will persist through February 2027, with Niño 3.4 sea-surface temperature anomalies reaching +2.2–2.6°C above normal. The event — the most unequivocal El Niño forecast WMO has ever issued — raises risks of floods, drought, and extreme heat globally. A developing positive Indian Ocean Dipole (IOD) may partially offset El Niño's typical weakening effect on India's monsoon. Current affairsThree New Part-Time Directors on RBI Central Board: Annie George Mathew, Janmejaya Kumar Sinha, Syed Akbaruddin — RBI Governance and the Central Board's RoleThe Government of India appointed Annie George Mathew (former Special Secretary, Ministry of Finance), Janmejaya Kumar Sinha (Chairman, BCG India), and Syed Akbaruddin (former Permanent Representative to the UN, now Dean of Kautilya School of Public Policy) as part-time non-official directors on the RBI Central Board for four-year terms effective August 24, 2026. Former ISRO chief S. Somnath and industrialist Anand Mahindra were also appointed/re-appointed to the board in the same round. Current affairsEl Niño 2026-27: NOAA Forecasts 69% Probability of Record-Breaking Intensity — India's Monsoon, Food Security, and Climate RisksNOAA's Climate Prediction Center has assessed a 69% probability that the 2026-27 El Niño will become the strongest on record (instrumental records date from 1950), with multi-model forecasts projecting a peak Niño 3.4 sea surface temperature anomaly of +3.6°C — surpassing the 2015-16 record of +2.75°C. The event is still intensifying with peak expected in November–December 2026, and poses significant risks to India's monsoon, kharif harvest, and global food security. Current affairsRBI MPC August 2026: Repo Rate Unchanged at 5.25%, Neutral Stance Retained — GDP Forecast Raised to 6.7%The Reserve Bank of India's Monetary Policy Committee (MPC) unanimously voted 6-0 to keep the policy repo rate unchanged at 5.25% in its 62nd meeting (August 3–5, 2026), retaining the 'Neutral' stance. The GDP growth forecast for FY 2026-27 was raised to 6.7%, while the CPI inflation projection was lowered to 5.0% (from 5.1% at the June 2026 meeting). Current affairsRBI Monetary Policy August 2026: Repo Rate Held at 5.25% for Fourth Consecutive Time, GDP Growth Forecast Raised to 6.7%The Reserve Bank of India's Monetary Policy Committee (MPC), at its August 3–5, 2026 meeting, unanimously kept the repo rate unchanged at 5.25% for the fourth consecutive time, retained its neutral stance, and raised India's FY27 GDP growth forecast from 6.6% to 6.7% while lowering the CPI inflation projection to 5.0%. Governor Sanjay Malhotra cited the need for greater clarity on the inflation trajectory before any rate action. Current affairsRBI Monetary Policy Committee August 2026: Repo Rate Held at 5.25%, GDP Forecast Raised to 6.7%, Inflation Cut to 5.0%The Reserve Bank of India's Monetary Policy Committee (MPC), at its 62nd meeting (August 3–5, 2026), unanimously voted to keep the policy repo rate unchanged at 5.25% while retaining the 'Neutral' stance. The RBI raised FY27 GDP growth forecast to 6.7% and lowered CPI inflation projection to 5.0%, reflecting domestic resilience and moderating demand-side pressures even as global geopolitical uncertainties persist. Current affairsRBI Keeps Repo Rate at 5.25%: August 2026 Monetary Policy ExplainedRBI Keeps Repo Rate at 5.25%: August 2026 Monetary Policy Explained
Featured Snippet: In its August 2026 meeting (3–5 August), the Reserve Bank of India's Monetary Policy Committee (MPC) unanimously kept the repo rate unchanged at 5.25% and retained a "neutral" stance....
In previous-year questions
- The 97th Constitutional Amendment (2012) is most directly relevant to which of the following?UPSC · Current Affairs
- 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 Monetary Policy Committee (MPC) of India is constituted under which of the following Acts?UPSC · 2026 · Economy