Which of the following is the highest policy-making body for monetary

Which of the following is the highest policy-making body for monetary matters in India?

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The Securities and Exchange Board of India

The NITI Aayog

The Ministry of Finance

The Reserve Bank of India

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UPSC Combined Section Officer – 2019-20

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The Reserve Bank of India (RBI) is the central bank responsible for monetary policy in India. The Monetary Policy Committee (MPC) within the RBI is the statutory body entrusted with the task of setting the benchmark policy rate (repo rate) to achieve the inflation target set by the government, while keeping in mind the objective of growth. This makes the RBI the highest policy-making body for monetary matters.

– RBI is the monetary authority of India.
– The Monetary Policy Committee (MPC) within RBI decides the key interest rates.
– SEBI regulates capital markets, NITI Aayog is a planning/advisory body, and the Ministry of Finance handles fiscal policy.

The MPC was constituted in 2016 and consists of six members – three officials from the RBI and three external members nominated by the government. The Governor of RBI is the ex-officio Chairperson. The decisions of the MPC are binding on the RBI.

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