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Monetary Policy
Welcome to the comprehensive UPSC study hub on Monetary Policy, a critical pillar of economic governance and an indispensable topic for every serious aspirant. At its core
8 articles in this topic
Articles on Monetary Policy
RBI buys ₹50,000 cr. G-Secs for liquidity, tranche 2 on Friday
Source: The Hindu(Page12) | Syllabus: GS3(Economy)
RBI Holds Repo Rate and Lowers Inflation Forecast
Context The Reserve Bank of India’s (RBI) in its Monetary Policy Committee (MPC) meeting decided to keep the repo rate unchanged at 5.50%. What is the Repo Rate? The repo rate is the rate at which the RBI lends short-term money to commercial banks.
Expansionary Policies in a Slowing Economy
Context India is currently witnessing a rare phase where both fiscal and monetary policies are expansionary. Benefits of Expansionary Policies in India Boosts Aggregate Demand: Expansionary fiscal policies like tax cuts and increased public spending raise disposable incomes and consumption. Similarly, lower interest rates encourage borrowing and investment, helping revive demand across sectors.
Microfinance Loan Delinquencies Jump 163% in FY2025
Context Indias microfinance sector has witnessed a 163% surge to Rs 43,075 crore in loan delinquencies in FY2025. What is Microfinance? Microfinance refers to financial services offered to low-income individuals or groups who are typically excluded from traditional banking.
Revised Economic Capital Framework of the Reserve Bank of India
Context The Board of Directors of Reserve Bank of India (RBI) has approved a record transfer of over 2.68 lakh crore rupees as surplus to the Central government for the financial year 2024-25. About The surplus was calculated under the revised Economic Capital Framework, which now mandates maintaining the Contingent Risk Buffer (CRB) between 5.50 per cent and 7.50 per cent of the central bank’s balance sheet. For 2024-25, the CRB has been increased to 7.50 per cent.
RBI Announces Over US$21 Billion Liquidity Infusion
In response to tight liquidity conditions in the banking system, the Reserve Bank of India (RBI) has announced a liquidity infusion initiative using two Open Market Operations (OMOs) and a USD/INR Buy/Sell Swap auction.
IMF Raised Concerns Related to NBFCs
The International Monetary Fund (IMF) has raised concerns about potential financial instability in India due to the concentrated exposure of Non-Banking Financial Companies (NBFCs) to the power and infrastructure sector.
Capital Account Convertibility
The Chairman of the 16th Finance Commission, Arvind Panagariya, said that India should not rush into full capital account convertibility at its current per capita income level.