Question

The primary role of the MPC is to:

• A. Issue currency notes
• B. Formulate monetary policy, including interest rate decisions
• C. Supervise banks on-sited) Manage foreign exchange reserve
• D. Manage foreign exchange reserve

Answer 1

Answer:

B. Formulate monetary policy, including interest rate decisions

The MPC decides on policy rates such as the repo rate and reverse repo rate. Its main objective is to maintain price stability while supporting economic growth. Other functions of RBI, like currency issuance, bank supervision, and foreign exchange management, are outside the MPC’s mandate.