[Solved] In India, Which of the Following is responsible of Maintaining Prices Stability by controlling inflation?

Q68) In India, Which of the Following is responsible of Maintaining Prices Stability by controlling inflation?

1. Department of Consumer Affairs
2. Expenditure Management Commission
3. Financial Stability and Development Council
4. Reserve Bank of India

Answer: d

• The Reserve Bank of India (RBI) is tasked with the responsibility of conducting monetary policy. The Reserve Bank of India Act, 1934 expressly mandates this obligation.
• Maintaining price stability is the major goal of monetary policy, while growth is also a consideration. A key prerequisite for sustainable growth is price stability.
• The necessary policy interest rate to reach the inflation objective is chosen by the MPC (Monetary Policy Committee).
• The Monetary Policy Department (MPD) of the Reserve Bank works with the MPC to develop monetary policy.
• The opinions of important economic players and the Reserve Bank’s analytical work are taken into consideration when deciding on the policy repo rate.
• The Financial Markets Operations Department (FMOD) of RBI operationalises the monetary policy, mainly through day-to-day liquidity management operations.
• The Financial Markets Committee (FMC) meets daily to review the liquidity conditions so as to ensure that the operating target of the weighted average call money rate (WACR) is aligned with the repo rate.