The Governor of the Reserve Bank of India has announced that the Policy Repo Rate will remain unchanged at 4% and the Reverse Repo Rate too will remain unchanged at 3.35% in RBI’s bi-monthly monetary policy meeting.
About Monetary Policy Committee
The Monetary Policy Committee is responsible for fixing the benchmark interest rate in India. The meetings of the Monetary Policy Committee are held bi-monthly. The committee comprises six members - three officials of the Reserve Bank of India and three external members nominated by the Government of India. The Governor of Reserve Bank of India is the chairperson of the committee. The Reserve Bank of India Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC which will bring more transparency and accountability in fixing India's Monetary Policy.
Repo rate is the rate at which the Reserve Bank of India lends money to commercial banks.
Reverse Repo Rate
the RBI borrows money from banks when there is excess liquidity in the market.
Sources : PIB